By Jui Chakravorty Das
CHICAGO (Reuters) - Illinois Tool Works' (ITW.N: Quote, Profile, Research, Stock Buzz) forecast of $800 million to $1.2 billion in acquired revenues on an annualized basis in 2008 "could be conservative," the diversified manufacturer's chief executive said on Tuesday.
"People could expect that we could have a better year than our range," David Speer told reporters at the Reuters Manufacturing Summit.
As lending markets remain tight and investment banks absorb the fallout from mortgage losses, private equity firms are having a hard time borrowing money to make acquisitions. Their retreat from deals is making larger assets available at lower prices.
Interest from private equity firms -- which buy and sell companies using money raised from institutional investors such as state pension funds and college endowments -- had pushed takeover prices sky-high.
Speer said larger assets could also become available in "exits" -- sales by private equity firms themselves.
He said the company, which made 52 acquisitions in 2007, will likely buy 40 to 45 companies this year.
He also said the Glenview, Illinois-based maker of fasteners, food service, welding equipment and other products ended January with about $100 million in acquired revenue.
He said ITW was looking at a pipeline of deals worth $1.3 billion, adding that the company typically closes 60 percent of the deals in its pipeline. Continued...
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