ITW Gets $1 Billion For Majority of Wilsonart

GLENVIEW, Ill. – Laminate manufacturer Wilsonart will have new ownership later this year, courtesy of a billion-dollar-deal announced today.

Illinois Tool Works Inc. (ITW) sold a 51-percent stake in its Decorative Surfaces segment, including  Wilsonart, for approximately $1.05 billion to a fund managed by private equity investors Clayton, Dubilier & Rice LLC (CD&R). The transaction will close in this year’s fourth quarter, subject to regulatory review.

The business will become a new, independent company operating as Wilsonart International Holdings, LLC (Wilsonart). Paul Pressler, a CD&R operating partner, will assume the role of interim chief executive officer of Wilsonart upon the close of the transaction.

CD&R will invest $395 million and borrow the balance; ITW will receive its payout in cash and also retain a 49-percent interest in the business. ITW, which trades on the New York Stock Exchange under the ITW symbol, intends to use a majority of after-tax proceeds to repurchase its own shares.

“The Decorative Surfaces segment has a variety of premium brands and is a valuable asset,” said David B. Speer, ITW chairman/CEO. “The transaction with CD&R creates an opportunity for the business to fully leverage the depth and breadth of its decorative surfacing products and technologies as well as their unique design and full-service capabilities.”

ITW acquired the Wilsonart, Reposal and Arborite brands in 1999 as part of its $3.6 million stock  merger with Premark International Inc. ITW’s board of directors announced in August 2008 that it sought to divest the Decorative Surfaces business.

Last year, ITW’s Decorative Surfaces segment had revenues of $1.1 billion and operating margins of 12 percent.
 
“We believe this transaction creates a very strong foundation for Wilsonart to deliver continued industry-leading performance and are pleased to have ITW as our partner as we work with the Wilsonart management team to further build the value of the business,” said CD&R Partner Nathan K. Sleeper.

CD&R, founded in 1978, currently owns/manages a majority interest in a wide variety of investments, including Hertz Corp., ServiceMaster and Sally Beauty Holdings Inc. (the largest U.S. distributor of professional beauty supplies). Previous acquisitions included Lexmark, Kinko’s, Remington Arms and Uniroyal Goodrich Tire.