ITW to buy materials handling manufacturer Quipp Systems

Industrial Distribution staff -- Industrial Distribution, 3/27/2008 6:25:00 AM

The Glenview, Ill.-based diversified manufacturer will pay at least $4.30 per share and as much as $5.65 per share for the Miami-based materials handling equipment manufacturer.

With roughly 1.48 million shares outstanding, that means ITW will pay between $6.4 million and $8.4 million for Quipp, whose shares were trading at $3 March 27, according to Google Finance.

"After a rigorous strategic alternatives evaluation, we strongly believe that our agreement with Illinois Tool Works represents the best alternative for Quipp and its shareholders. The transaction will offer our shareholders a meaningful premium over the current trading price. It also will enable Quipp's employees to become part of a much larger and financially stronger organization. In addition, it should provide excellent cost saving opportunities, including savings resulting from Quipp no longer being subject to the burdens of operating as a stand-alone public company, which have become very expensive over the past few years,” president and CEO Michael Kady said.

The company’s directors and another shareholder, who together own about 12 percent of Quipp, agreed to vote in favor of the merger, which Quipp said is expected to close in the spring or early summer.

The company makes material handling systems and equipment to automate the insertion, assembly, bundling and movement of newspapers from the printing press to the delivery truck.