By Soyoung Kim and Greg Roumeliotis
NEW YORK, Nov 25 (Reuters) - At least six major privateequity groups are competing to buy the industrial packagingsegment of Illinois Tool Works Inc, in a deal that couldfetch more than $3 billion, according to people familiar withthe matter.
Carlyle Group LP, Blackstone Group LP, ApolloGlobal Management LLC, Bain Capital LLC, Ares ManagementLLC and a consortium of Onex Corp and the CanadaPension Plan Investment Board (CPPIB) are among the firms thatadvanced to the second round of bidding, the people said.
The people asked not to be named because details of theauction are not public. Illinois Tool Works did not immediatelyrespond to requests for comment, while representatives for thebuyout firms either declined to comment or did not respond torequests for comment.
Illinois Tool Works announced in September it was initiatinga process to sell the industrial packaging unit, as theconglomerate continues to streamline its diversified businesslines.
The packaging business, which had revenue of about $2.4billion in 2012, makes steel, plastic and paper products usedfor bundling, shipping and protecting transported goods, withbrands including Signode, Strapex, Angleboard and Mima.
"After carefully considering the underlying value of thebusiness, the level of preliminary interest from potentialbuyers and a favorable debt market, the company and our board ofdirectors have opted to initiate a sale process for theindustrial packaging segment," Chief Executive Scott Santi saidat the time of the announcement.
The Glenview, Illinois-based company makes a variety ofitems, including restaurant equipment, construction products,electronic components and auto parts. It has been trying to exitless profitable markets and shed businesses with commodity-typeproduct lines.
Private equity firms, chasing deals to deploy capital in alow interest rate environment, have shown a strong appetite forlarge units being carved out of companies seeking to exitnon-core businesses.
In the healthcare sector, a consortium of Blackstone GroupLP and Danaher Corp are competing against Carlylein the bidding for Johnson & Johnson's clinicaldiagnostics unit, Reuters reported last week.
- Private Equity & Hedge Funds
- Illinois Tool Works Inc
- Apollo Global Management LLC
- Blackstone Group
- Private equity firms
- Bain Capital LLC
- private equity
- Onex Corp