A Reuters report today about "the private equity-fueled buyout craze that has taken dozens of U.S. public companies private" speculates that Illinois Tool Works Inc. could be a promising takeover target. The report quotes Victor Consoli, Bear Stearns corporate credit strategist, and Ann Duignan, a Bear Stearns manufacturing analyst. The story does not give any hint about whether ITW's board would be interested in an offer, and whether anything is likely. It also quotes Consoli saying that a buyout wave could start in the coming weeks, "before Europe goes to sleep" for the summer and before interest rates rise. Coincidentally, perhaps, the Chicago Sun-Times had a story on Monday naming ITW Chairman and CEO David Speer as "fantasy recruit," an executive who would be easy to place.
For 29 years, Speer has "evergreened" his career every few years inside ITW instead of looking outside for new challenges. Today he leads one of the few manufacturing organizations that have instilled an innovation culture. ITW''s business managers, often from acquired companies, are encouraged to become takeover artists and deal makers themselves. In fact they're fully commissioned in how to integrate an acquisition and retain its value -- a key success factor in the battle for marketplace supremacy.Can you imagine combining ITW's takeover expertise with the deep pockets of the right private equity owner? ITW already has quite a few plastics-related holdings. It would be interesting to see what others ITW would add to its portfolio.