I would recommend cedar for the wood. You could get by with a hammer and handsaw but if you plan to do more similar things in the future you might want to invest in a drill, which is a very valuable tool for all kinds of basic home repair projects. While cordless drills are really handy, they're not really necessary especially if you don't plan on working places like attics etc. without power. A regular corded one would be cheaper. If using screws instead of nails, you'll need a drill to pre-drill holes. You can also get driver bits to fit in your drill so you can use it as a screwdriver instead of doing by hand (just a no. 8 Robertson bit will cover all kinds of things, including this project). Using screws instead of nails can make for a stronger, more durable product, and also one that can be disassembled. When choosing screws or nails to use make sure they're suitable for outdoors - e.g., galvanized or stainless steel, such as deck screws.
If you post the dimensions and shape/look you have in mind someone could give you a rundown of materials and how to construct.