Industrial tool maker,
Illinois Tool Works Inc.
) recently announced a major acquisition of a Chinese food
equipment maker that will enable the company to diversify its
food equipment portfolio and expand its operations in China as
well. Financial terms have been kept under wraps.
The acquisition of Gold Pattern Holdings from private equity
firm Actis has added the well-renowned Chinese kitchen equipment
manufacturer Vesta to Illinois Tool's portfolio. Gold Pattern
holds 100% of Vesta Global Ltd. which in turn has control of 100%
equity stake in Vesta (Guangzhou) Catering Co., Ltd. (Vesta).
Vesta apart from very attractive products that are sold under
Justa brand has a solid client base that includes four and five
star hotels and chain restaurants.
Acquisition is one of the preferred ways of expansion for
Illinois Tool. The company spent nearly $730 million on
acquisitions for annualized acquired revenue of approximately
$500 million in 2012.
Other strategic initiatives of Illinois Tool aimed at
long-term growth include Business Simplification and Strategic
Sourcing. The first strategy is expected to bring smaller revenue
generation units having common products or line of business under
one roof while the second initiative will enable the company to
better manage its raw materials and other costs.
Illinois Tool Works currently has a $31.5 billion market
capitalization. The stock currently has a Zacks Rank #3 (Hold).
Other stocks to watch out for are
Kawasaki Heavy Industries Ltd.
), with a Zacks Rank #1 (Strong Buy) and
Broadwind Energy, Inc.
Chart Industries Inc.
), each with a Zacks Rank #2 (Buy).
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ILL TOOL WORKS (ITW): Free Stock Analysis
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