Industrial tool maker,
Illinois Tool Works Inc.
) recently opted for raising funds from the market through issuance
of $1.1 billion principal amount of Senior Unsecured Notes due to
mature on September 1, 2042. The notes, expected to yield 3.995% at
maturity, were offered at 99.038% of the principal amount.
The notes carry a coupon rate of 3.9% to be paid semi-annually
by the company with the first installment accruing on March 1,
2013. The notes carry an A1 rating from Moody's and A-PLUS from
Illinois Tool Works estimates collection of approximately $1.078
billion, net of underwriting expenses and other issue expenses from
the notes offering, and intends to repay its near-term maturing
debts and meet its general corporate purposes by using the amount.
As of six months ended June 30, 2012, the company had earnings to
fixed charges ratio of 11.8x as against 11.3x ending year 2011.
Exiting the second quarter 2012, Illinois Tool Works had a cash and
cash equivalents balance of $1,692.0 million and long-term debt
balance, net of current portion, of $3,468.0 million.
This announcement succeeds the company's announcement of a 51%
stake divestment in its Decorative Surfaces division to a fund
managed by Clayton, Dubilier & Rice, LLC (CD&R) for
approximately $1.09 billion in cash.
In the second quarter 2012, Illinois Tool Works reported an EPS
from continuing operations of $1.11, up 16% year over year.
Operating revenue grew marginally by 0.87% to $4,655 million, lower
than management's projected growth range of 3.5%-6.0%. For the
third quarter 2012, management anticipates that earnings per share
would be within the $1.03-$1.11 range.
The Zacks Consensus Estimate for the third quarter 2012 stand at
$1.06, up 6.2% year over year. Estimates for 2012 and 2013 are at
$4.12 and $4.51, representing year-over-year growth of 0.94% and
Illinois Tool Works is one of the leading manufacturers of
industrial products and equipment operating through 800 business
units in 57 countries. It competes with companies like
Cooper Industries plc.
General Electric Co.
Manitowoc Co. Inc.
We currently maintain a Neutral recommendation on Illinois
Tools. The stock also bears a Zacks #4 Rank, implying a short-term
COOPER INDS PLC (CBE): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis Report
ILL TOOL WORKS (ITW): Free Stock Analysis
MANITOWOC INC (MTW): Free Stock Analysis Report
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