Illinois Tool Works nets British firm for $2 billion

ACQUISITIONS | Conglomerate's bid tops Manitowoc's

Illinois Tool Works Inc., a conglomerate known for making dozens of mostly small acquisitions every year, landed an agreement for its biggest deal since 1999 on Thursday when British restaurant equipment supplier Enodis PLC accepted its $2 billion buyout.

The all-cash offer trumped an offer that Enodis agreed to last month from Manitowoc Co. Inc., leading investors and analysts to speculate about a possible bidding war.

Manitowoc, based in the Wisconsin town of the same name, said Thursday it was considering its position and would make an announcement later.

Illinois Tool Works, a Glenview-based manufacturer of engineered products with more than 800 business units in 49 countries, made an offer that was 8.5 percent above the Manitowoc bid. Enodis would be its most expensive acquisition since 1999, when it paid $3.8 billion for consumer products maker Premark International.

''The Enodis price seems rich, but so did Premark,'' said Citigroup analyst David Raso in a note to investors.

Manitowoc shares gained $1.89, or 4.9 percent, to $40.30 in trading Thursday in New York, while Illinois Tool shares fell 5 cents to $52.89.

Enodis shares rose 88 cents, or 18.4 percent, to close at $5.66 -- above the ITW's $5.33 offer. Manitowoc's bid is $5.09 a share.

Acquiring Enodis, which supplies fryer systems to restaurants including McDonald's Corp., would nearly double Illinois Tool's food equipment business and make the combined food equipment business nearly a fifth of its total revenues. The company had $16.3 billion in revenue last year.

Morningstar analyst John Kearney noted that buying a company with $1.6 billion in annual sales amounts to a typical year's worth of acquisitions for Illinois Tool, which bought 40 companies last year. AP