Minneapolis, Minnesota - Graco Inc. is to buy the finishing businesses of Illinois Tool Works Inc. in a $650-million cash transaction. The ITW businesses make and distribute equipment for industrial liquid finishing, powder coating and automotive refinishing, worldwide.
Graco said key attributes of the ITW businesses include:
•2010 revenues of $305 million, of which 40 percent were in the Americas and 60 percent were elsewhere;
•Significant operations are located in the US, Switzerland, UK, Japan, Brazil and Mexico, with sales offices and distribution capabilities in several additional countries;
•Leading equipment technologies and brands, such as Gema powder finishing equipment, Binks industrial pumping solutions, DeVilbiss auto refinish guns and accessories, Ransburg electrostatic guns and accessories, and BGK curing technology;
•Professional management and 900 employees worldwide; and
•Global manufacturing capabilities/capacity.
Graco, a leading maker of fluid handling equipment including polyurethane machinery, plans to finance the transaction through a $450-million revolving credit facility (via US Bank National Association and JP Morgan) as well as long-term debt of $300 million.
The purchase is expected to add to Graco's sales immediately and results will be reported as part of Graco's Industrial segment.
The deal is expected to close in June 2011, pending regulatory reviews and other conditions.
Graco's ceo Pat McHale said, "This acquisition is 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."
According to McHale, Graco gains "a leading position in industrial powder paint equipment - a growing global market where we have no offering today.
The Graco boss added that In liquid finishing, ITW's technologies complement Graco's Industrial offering and "also give us a leading position in automotive refinish where we have little presence.