PE firm Carlyle to buy Illinois Tool's packaging unit for $3.2 bn

07 Feb 2014

US private equity firm The Carlyle Group today said that it would acquire Industrial Packaging Group (IPG) from Illinois Tool Works Inc (ITW), for $3.2 billion.

The Washington, DC-based PE firm said that Equity for the transaction will come from Carlyle Partners VI, a $13 billion US buyout fund.

ITW, a diversified manufacturer with businesses in automotive parts, kitchen appliances and other industries, last year said that it would explore a possible sale of its industrial packaging business, which generated revenue of about $2.4 billion in 2012.

Headquartered in Glenview, Illinois, IPG is a global manufacturer of strap, stretch, and protective packaging consumables, tools and equipment used in the shipping process.

It has 88 manufacturing locations on six continents and serves 45 countries.

Carlyle said that the company has a well-established track record in its markets, highlighted by a hundred-year history of innovation at Signode, one of IPG's primary strap packaging brands.

"The Industrial Packaging business is an industry leader with a strong management team and highly dedicated people. We thank them all for their many contributions to ITW and know they will continue to thrive as an investment of The Carlyle Group," said, Scott Santi, ITW president and CEO.

Brian Bernasek, managing director of Carlyle, said, ''IPG is a highly diversified business with strong management, attractive market positions and excellent free cash flow. 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.''

Since inception, Carlyle has invested more than $9 billion in industrial transactions around the globe.

Its current and former investments include Accudyne Industries, Axalta Coating Systems, Allison Transmission, AxleTech International, and Rexnord.