ITW to sell finishing group companies

Illinois Tool Works Inc. announced that it has entered into a definitive agreement to sell its finishing group of businesses to Graco Inc. in a $650 million cash transaction.

The sale is not expected to be completed until June 2011 at the earliest to accommodate regulatory reviews. ITW's finishing equipment businesses consist of paint spray systems and technologies for a variety of industrial end markets and applications around the world. Key businesses include Gema, Ransburg, DeVilbiss, BGK and Binks. These businesses provide wet industrial finishing as well as powder paint equipment and drying technologies. The finishing businesses revenues were $305 million in 2010. ITW intends to utilize after-tax proceeds from the sale to repurchase shares as part of its share repurchase program.

"ITW's finishing businesses offer a variety of premium worldwide brands which collectively represent a very valuable asset," said David B. Speer, chairman and chief executive officer. "We believe the sale of these assets to an industry leader like Graco presents our finishing businesses with an excellent opportunity to optimize their long-term growth and profitability."

Founded in 1926, Graco manufactures fluid handling systems and components. Graco's revenues totaled $744 million in 2010.

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