Diversified industrial manufacturer ITW will sell six of its businesses, which have combined revenues of more than $600 million, according to company officials. In an earnings call conference with analysts last week, ITW said those six units are involved in construction distribution and transportation-related products.
ITW had previously said it would sell off slower-growing units and focus on those with the most potential for growth. ITW said the six businesses have an operating margin of about 7%, compared with a 16.5% margin for the whole company during the first quarter, the Wall Street Journal reported.
E. Scott Santi, president and CEO of the Glenview, Il.-based company, said during the call that the company will continue to evaluate whether or not the company will sell or spin-off its industrial packaging business, which accounted for 14 percent of ITW’s revenues last year. The company announced in February that it was conducting a strategic review of that business.
The packaging segment, which had sales of $2.4 billion last year, produces metal and plastic strapping for bundling bulk items, such as bricks, and protective plastic wrap used to ship goods.
“So there's been no formal decision to divest it via sale, spin or whatever,” Santi said. “That's currently what we're working through internally within the company and at the board level. And once we get to a decision on the path, that'll be announced. I wouldn't expect it to be sold or spun off or anything to happen in 2013. It's probably likely a 2014 event if something does happen,” he said according to a transcript of the call as provided by www.seekingalpha.com .
Santi also said that the economic environment is good for those companies seeking to acquire ITW’s businesses, particularly with the current low interest rates.
He added that ITW, which has been a leading acquirer of companies over the years, has not made more acquisitions a priority in 2013.
“That does not mean that we wouldn't look very seriously at something that was a really strong fit and a great opportunity, but ultimately, from a standpoint of how much time we're spending looking at acquisitions, it is a lower priority this year,” he said.