Illinois Tool Works Inc., the manufacturing conglomerate that owns a variety of industrial goods and supplier companies, has an agreement to sell its finishing businesses to Graco Inc. for $650 million in cash. The companies involved in the sale produce paint-spray systems and products, and include Gema® powder finishing equipment, Binks® industrial pumping solutions, DeVilbiss® auto refinish guns and accessories, Ransburg® electrostatic guns and accessories, and BGK curing technology.
"ITW's finishing businesses offer a variety of premium worldwide brands that collectively represent a very valuable asset," stated ITW chairman and CEO David B. Speer. "We believe the sale of these assets to an industry leader like Graco presents our finishing businesses with an excellent opportunity to optimize their long-term growth and profitability."
Graco manufactures fluid handling systems and components used in vehicle lubrication and other commercial and industrial applications. It emphasized that the prospective new holdings give it significant manufacturing, sales, and distribution holdings in overseas markets. It said the new operations had 2010 revenues of $305 million (60% of which were from international markets), and predicted these holding would be cash-accretive immediately.
The final transaction may be complete by June, but is pending regulatory reviews and other closing conditions.
Graco CEO Pat McHale called the acquisition “an excellent strategic fit with Graco’s Industrial segment. It will advance all of our stated core growth strategies: new products and technology, geographic expansion, and new markets.