UPDATE 2-Illinois Tool buying newspaper equipment maker

(Adds details on Quipp business, comments from ITW spokeswoman, byline, updates share move)

By Helen Chernikoff

NEW YORK, March 27 (Reuters) - Quipp Inc QUIP.O, which makes newspaper handling equipment, said on Thursday it would be acquired by diversified manufacturer Illinois Tool Works (ITW.N) for a price between $6.4 million and $8.4 million.

Quipp, whose equipment moves newspapers from the printing press to the delivery truck, will complement ITW's industrial packaging business, ITW spokeswoman Alison Donnelly said.

Industrial packaging represents about 15 percent of ITW's annual revenue. The company posted operating revenue of $16.17 billion in 2007.

ITW will pay between $4.30 and $5.65 per share for Quipp. The final price will be based on adjustments related to Quipp's cash and cash equivalents and indebtedness prior to the deal's closing.

Quipp said its board unanimously approved the deal but will not proceed if the final price falls below $4.30 per share. It said it considers this unlikely and sees the transaction closing in the spring or early summer.

ITW, which has a market capitalization of nearly $26 billion, makes about 50 acquisitions per year with an average purchase price of $20 million, Donnelly said.

Quipp shares were up 62 percent at $4.87 in midday trade on the Nasdaq. ITW shares were down 2 cents at $48.76 on the New York Stock Exchange. (Reporting by Helen Chernikoff; editing by John Wallace and Dave Zimmerman)