Graco To Sell Liquid Finishing Business Assets To Carlisle For $590 Mln Cash

(RTTNews) - Graco Inc. (GGG), a manufacturer of fluid handling equipment, Wednesday said it has signed a definitive agreement to sell the Liquid Finishing business assets in a $590 million cash transaction with Carlisle Companies Inc. (CSL).

These assets were purchased as part of Graco's acquisition of the Finishing Brands business from Illinois Tool Works (ITW) on April 2, 2012.

The transaction is expected to close no later than the first quarter of 2015.

The divestiture is expected to be in compliance with the final Decision and Order that the United States Federal Trade Commission approved on October 6, which requires the company to complete a sale of the Liquid Finishing business assets within 180 days of the Decision and Order.

The Liquid Finishing business assets included in the sale to Carlisle are those involved in the development, manufacture and sale of Binks spray finishing equipment, DeVilbiss spray guns and accessories, Ransburg electrostatic equipment and accessories, and BGK curing technology.

Graco is required to divest all these assets under the Decision and Order. The 2012 acquisition of Finishing Brands from ITW also included Gema, a global leader in powder coating technology, which passed review by the FTC and is now part of Graco.

Graco will continue to hold the Liquid Finishing business separate from its other businesses until the sale process is complete.

The day-to-day operations are managed independently by experienced Liquid Finishing business managers, under the supervision of a trustee appointed by the FTC, reporting directly to the FTC.

Goldman, Sachs & Co. is serving as financial advisor and Lindquist & Vennum LLP and Covington & Burling LLP are serving as legal counsel to Graco.

Meanwhile, Carlisle said separately that with annual sales of about $275 million, Liquid Finishing Brands is a global manufacturer and supplier of liquid finishing equipment and systems serving diverse end markets for paints and coatings.

These markets include OE automotive, automotive refinishing, aerospace, agriculture, construction, marine, rail and other industrial applications.

The business operates from 26 locations in seven countries with 50 percent of its sales in the Americas and the remainder primarily in Asia and Europe.

Carlisle expects the transaction to be accretive in the first year. The company will include Liquid Finishing Brands in a new industry segment named Carlisle Fluid Technologies.

GGG closed at $70.07 on Tuesday, and CSL settled at $74.84.