Private equity firm buys ITW industrial packaging business

By Jim Johnson
Senior Staff Reporter

Published: February 6, 2014 8:08 pm ET
Updated: February 6, 2014 9:52 pm ET

Related to this story

Topics Mergers & Acquisitions Packaging Extrusion Film & Sheet Recycling
Companies & Associations

Illinois Tool Works Inc. is selling off its global industrial packaging business, which represents a significant chunk of its annual sales, in a deal with a well-known private equity firm.

The move is part of a larger plan to narrow the company’s portfolio.

The Carlyle Group is paying in a $3.2 billion for the packaging assets that include 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.

Carlyle expects the transaction, subject to regulatory approval, to close by the middle of this year.

“IPG (Industrial Packaging Group) is a highly diversified business with strong management, attractive market positions and excellent free cash flow,” said Brian Bernasek, Carlyle managing director, in a press release. “We will leverage Carlyle’s global network to support the Company’s growth, and we look forward to helping IPG achieve its full potential as it transitions to a standalone company.”

Sales of the packaging business were $2.4 billion in 2012, ITW has said, and represent more than 10 percent of the firm’s annual revenue.

Cash from the sale will help with a stock buyback plan aimed at offsetting earnings per share dilution that will happen after the packaging business is sold. ITW, which wants to repurchase 50 million shares, had bought back 14 million as of the end of 2013.

ITW, when it announced plans to sell off the packaging operations in September, said the company wanted to narrow its portfolio, which included about 800 businesses.

The company cited interest from potential buyers as well as a favorable debt market in deciding to sell the industrial packaging segment.

Carlyle’s new business is based in Glenview, Ill., and has 88 manufacturing sites on six continents that serve 45 countries.

While this is certainly a big transaction, Carlyle Group is used to taking big swings. The company had $185 billion of asset under management as of Sept. 30.


Comments

Private equity firm buys ITW industrial packaging business

By Jim Johnson
Senior Staff Reporter

Published: February 6, 2014 8:08 pm ET
Updated: February 6, 2014 9:52 pm ET

Post Your Comments


Back to story


More stories

Image

Dow Chemical to merge chlorine operations with Olin

March 27, 2015 12:43 pm ET

Dow Chemical Co. is combining a large part of its chlorine value chain with specialty chemicals and ammunition maker Olin Corp. to create a global...    More

Image

Flextronics launches global injection molding, tooling unit

March 26, 2015 4:29 pm ET

Flextronics International Ltd. (Booth S34125) is officially launching Precision Plastics, a global injection tooling and manufacturing unit, as a...    More

Image

Core Molding buys CPI Binani assets, adds markets, D-LFT capabilities

March 20, 2015 1:20 pm ET

Core Molding Technologies Inc. is expanding its thermoplastics capabilities with the acquisition of substantially all the assets of CPI Binani Inc.,...    More

Image

Proposed Cardia-Stellar merger labeled 'not fair,' but still 'reasonable'

March 20, 2015 10:34 am ET

If the proposed merger of two Australian bioplastics companies goes ahead, the new company will be called Secos Group Ltd. and have annual sales of...    More

Image

Transilwrap buys Clear Focus, expands in advertising films

March 20, 2015 10:03 am ET

Film extruder Transilwrap Company Inc. has bought Clear Focus Imaging, a manufacturer of printable plastic films for large-scale display advertising l...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

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

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

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

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

More Events