ITW moves ahead with plan to sell industrial packaging business

By Jim Johnson
Senior Staff Reporter

Published: September 24, 2013 1:59 pm ET
Updated: September 24, 2013 2:01 pm ET

Related to this story

Topics Packaging, Mergers & Acquisitions, Extrusion

Illinois Tool Works Inc., a diversified global manufacturer, wants to become a little less diverse.

So the Glenview, Ill.-based company is moving ahead with plans to sell off its industrial packaging segment, a business that represents more than 10 percent of the company’s overall sales. ITW has been exploring options for months after commencing a review if the business in February.

With 2012 sales of $2.4 billion, ITW’s packaging business involves strap, stretch and protective consumables, tools and equipment used to bundle, ship and protect goods. Those packaging products are made from plastic, steel and paper.

Brands within the packaging segment include Signode, Strapex, Orgapack, Angleboard and Mima, the company said.

ITW will reclassify the business as a discontinued operation this quarter and expects to sell of the operations by the middle of next year.

“After carefully considering the underlying value of the business, the level of preliminary interest from potential buyers and a favorable debt market, the Company and our board of directors have opted to initiate a sale process for the Industrial Packaging segment,” CEO E. Scott Santi said in a statement.

“With this move, we are taking a sizeable step in the implementation of our strategy to narrow the focus of our portfolio,” he said.

ITW has approximately 800 businesses and posted sales of $18 billion in 2012. But the company has signaled an intention to sell off its commodity-based businesses that represent about a quarter of is portfolio.

Taking such a big chunk out of annual sales will influence earnings per share, ITW reported. To combat this impact, the company plans to repurchase about 50 million shares of stock between now and the end of next year. This will lower the overall share count and, as a result, boost EPS.

Current EPS guidance for the full year will fall by 13 to 15 cents during the third quarter and 51-55 cents per share for the entire year, ITW said. The company now expects EPS of 84-92 cents per share during the third quarter and $3.50 to $3.66 per share for the entire year.

The guidance change from July also includes a 9 cent per share drop related to a tax charge related to foreign earnings for both the quarter and the year, the company said.


Comments

ITW moves ahead with plan to sell industrial packaging business

By Jim Johnson
Senior Staff Reporter

Published: September 24, 2013 1:59 pm ET
Updated: September 24, 2013 2:01 pm ET

Post Your Comments


Back to story


More stories

Image

Brown signs California's plastic bag ban into law

September 30, 2014 1:38 pm ET

Gov. Jerry Brown (D) made it official today: plastic bags are banned across the entire state of California.    More

Image

Teens put a cap on watery ketchup

September 30, 2014 1:57 pm ET

Whether you spell it ketchup or catsup, use it on burgers or fries, or prefer Heinz or Hunt's, there is one universal problem for the ages: That...    More

Image

RJG buys UK training group G&A

September 30, 2014 11:10 am ET

G&A Moulding Technology Ltd., a United Kingdom-based training and consultancy group, has been bought by RJG Inc., the U.S.-based training business.    More

Image

Amcor planning more growth in Asia

September 30, 2014 10:24 am ET

Flexible packaging firm Amcor Ltd. is rapidly expanding its presence in the Asian market. The company's top official in the region said it will soon...    More

Image

Uflex to build large flexible packaging plant in western India

September 30, 2014 10:01 am ET

Flexible packaging company Uflex Ltd. is planning a major new plant in the western Indian state of Gujarat.    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events