Graco Closes Finishing Brands Acquisition
April 02 2012 - 9:38AM
Business Wire
Graco Inc. (NYSE: GGG) announced today that it has closed
on its $650 million acquisition of the Illinois Tool Works Inc.
(NYSE: ITW) finishing businesses. The Company previously announced
that it reached an agreement with the United States Federal Trade
Commission (“FTC”), which allowed for closing to occur while the
FTC investigates and considers a settlement proposal from
Graco.
The acquisition includes complementary powder and liquid
finishing equipment operations, technologies and brands. In powder
finishing, Graco has added Gema®, a global leader in superior
powder coating technology (the “Powder Finishing” business), and
approximately one-third of the purchase price is expected to be
allocated to this business. In industrial liquid finishing, the
acquisition includes Binks® spray finishing equipment, DeVilbiss®
spray guns and accessories, Ransburg® electrostatic equipment and
accessories and BGK curing technology (excluding Powder Finishing,
collectively known as the “Liquid Finishing” businesses).
As disclosed on March 27, 2012, the FTC has issued an order for
Graco to hold the Liquid Finishing assets separate from the Powder
Finishing and other Graco businesses while the FTC investigates and
considers a settlement proposal from Graco. In compliance with the
FTC’s order, the Liquid Finishing businesses have been acquired
into a structure that limits commingling of the Liquid Finishing
operations with Graco’s other businesses. Although the Liquid
Finishing businesses are wholly-owned by Graco, they will be run
independently by existing management under the supervision of a
trustee who reports directly to the FTC.
At the completion of its review, the FTC will issue a final
decision and order that will identify the products, businesses
and/or assets that Graco will be required to divest. Such
divestiture must be completed in the 180 days following the
issuance of the final decision and order and may include up to all
of the Liquid Finishing businesses.
Graco Inc. supplies technology and expertise for the management
of fluids in both industrial and commercial applications. It
designs, manufactures and markets systems and equipment to move,
measure, control, dispense and spray fluid materials. A recognized
leader in its specialties, Minneapolis-based Graco serves customers
around the world in the manufacturing, processing, construction and
maintenance industries. For additional information about Graco
Inc., please visit us at www.graco.com.
Cautionary Statement Regarding
Forward-Looking Statements
A forward-looking statement is any statement made in this
release that reflects the Company’s current thinking on the
acquisition of the finishing business from ITW. All forecasts and
projections are forward-looking statements. The Company undertakes
no obligation to update these statements in light of new
information or future events.
The Company desires to take advantage of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995
by making cautionary statements concerning any forward-looking
statements made by or on behalf of the Company. The Company cannot
give any assurance that the results forecasted in any
forward-looking statement will actually be achieved. Future results
could differ materially from those expressed, due to the impact of
changes in various factors. These risk factors include, but are not
limited to: whether and when the required regulatory approvals will
be obtained, whether and when the Company will be able to realize
the expected financial results and accretive effect of the
transaction, how customers, competitors, suppliers and employees
will react to the transaction, economic changes in global markets,
the extent of the acquired businesses required to be divested,
whether the Company will be able to find a suitable purchaser(s)
and structure the divestiture on acceptable terms, and whether the
Company will be able to complete a divestiture in a time frame that
is satisfactory to the Federal Trade Commission. Please refer to
Item 1A of, and Exhibit 99 to, the Company’s Annual
Report on Form 10-K for fiscal year 2011 for a more comprehensive
discussion of other risk factors that relate generally to the
Company’s business and financial condition. The Annual Report on
Form 10-K is available on the Company’s website at www.graco.com and the Securities and Exchange
Commission’s website at www.sec.gov.
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