MINNEAPOLIS--(BUSINESS WIRE)--Oct. 6, 2014--
Graco Inc. (NYSE: GGG), a leading manufacturer of fluid handling
equipment, announced today that it has received notice from the United
States Federal Trade Commission (FTC) requiring the Company to divest
the Liquid Finishing business assets that were acquired in a larger
transaction from Illinois Tool Works (ITW) on April 2, 2012. The FTC’s
final Decision and Order requires Graco to complete the sale process in
no more than 180 days.
The Liquid Finishing business assets that Graco is required to divest
include those involved in the development, manufacture and sale of Binks®
spray finishing equipment, DeVilbiss® spray guns and
accessories, Ransburg® electrostatic equipment and
accessories, and BGK curing technology. The 2012 acquisition from ITW
also included Gema®, a global leader in powder coating
technology, which passed review by the FTC and is now part of Graco.
“While disappointing, the Order from the FTC has been expected,” said
Patrick J. McHale, Graco’s President and Chief Executive Officer. “We
are prepared to complete the sale within the timeframe allowed by the
Decision and Order.”
Graco will continue to hold the Liquid Finishing business separate from
its other businesses and maintain them as viable and competitive until a
sale process is complete. The day-to-day operations are managed
independently by experienced Liquid Finishing business managers, under
the supervision of a trustee appointed by the FTC and reporting directly
to the FTC.
In 2013, the Liquid Finishing business generated unadjusted sales of
$279 million. Graco’s cost investment in the business is $422 million.
About Graco
Graco Inc. supplies technology and expertise for the management of
fluids and coatings in both industrial and commercial applications. It
designs, manufactures and markets systems and equipment to move,
measure, control, dispense and spray fluid and powder materials. A
recognized leader in its specialties, Minneapolis-based Graco serves
customers around the world in the manufacturing, processing,
construction and maintenance industries. For additional information
about Graco Inc., please visit us at www.graco.com
or on Twitter @GracoInc.
Cautionary Statement Regarding Forward-Looking Statements
A forward-looking statement is any statement made in this earnings
release and other reports that the Company files periodically with the
Securities and Exchange Commission, as well as in press releases,
analyst briefings, conference calls and the Company’s Overview report to
shareholders, which reflects the Company’s current thinking on the
divestiture of the Liquid Finishing equipment operations. All forecasts
and projections are forward-looking statements. The Company undertakes
no obligation to update these statements in light of new information or
future events.
The Company desires to take advantage of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995 by making
cautionary statements concerning any forward-looking statements made by
or on behalf of the Company. The Company cannot give any assurance that
the results forecasted in any forward-looking statement will actually be
achieved. Future results could differ materially from those expressed,
due to the impact of changes in various factors. Risk factors related to
the Company’s proposed divestiture of the Liquid Finishing equipment
operations include but are not limited to: whether and when the Company
will be able to realize the expected financial results and effect of the
transaction; how customers, competitors, suppliers and employees react
to the transaction; economic changes in global markets; whether the
Company will be able to find a suitable purchaser(s) and structure the
divestiture on acceptable terms; and whether the Company will be able to
complete a divestiture in a time frame that is satisfactory to the
Federal Trade Commission. Please refer to Item 1A of the Company’s
Annual Report on Form 10-K for fiscal year 2013 (and most recent Form
10-Q) for a more comprehensive discussion of these and other risk
factors that relate generally to our business and financial condition.
These reports are available on the Company’s website at www.graco.com/ir
and the Securities and Exchange Commission’s website at www.sec.gov.
Source: Graco Inc.
Graco Inc.
James A. Graner, 612-623-6635
or
Media:
Bryce
Hallowell, 612-623-6679
bhallowell@graco.com