| NEW YORK
NEW YORK Feb 6 Illinois Tool Works Inc
is nearing a deal to sell its industrial packaging unit for more
than $3 billion, with buyout firms Carlyle Group LP and
Onex Corp competing in the final stretch of the
auction, people familiar with the matter said.
The company narrowed the list of potential buyers to Carlyle
and the consortium of Onex Corp and Canada Pension Plan
Investment Board (CPPIB) after reviewing final offers submitted
on Monday, and could strike a deal as soon as this week, the
people said on Thursday.
Carlyle, which has a long track record of successfully
carving out units from companies, is seen as the leading
candidate to clinch the deal, according to one of the people. It
could not be learned, however, if Illinois Tool Works has
granted exclusivity to either bidder.
All the sources asked not to be identified because the
matter is not public. Carlyle declined to comment while
representatives for Illinois Tool Works, Onex and CPPIB did not
immediately respond to requests for comment.
Illinois Tool Works announced in September it was initiating
a process to sell the industrial packaging unit, as the
conglomerate continues to streamline its diversified business
The packaging business makes steel, plastic and paper
products used for bundling, shipping and protecting transported
goods, with brands including Signode, Strapex, Angleboard and
Seeking to avoid frothy auctions for companies as markets
rallied, private equity firms have shown a strong appetite for
large units being carved out of companies seeking to exit
Those deals involve the creation of new companies and are
complex. Firms with experience in executing corporate carve-outs
feel they have an edge in such situations.
Last month, Carlyle said it would acquire a clinical
diagnostics unit from Johnson & Johnson for $4.15
This followed Carlyle's acquisition in February 2013 of
DuPont's performance coatings business for $4.9 billion, and its
$3.46 billion acquisition of United Technologies Corp's
Hamilton Sundstrand industrial unit in 2012, along with buyout
firm BC Partners Ltd.