Graco Closes Sale of Liquid Finishing Business to Carlisle - Analyst Blog

Premier fluid handling equipment manufacturer Graco Inc.GGG recently completed the divesture of its Liquid Finishing business to diversified manufacturing firm Carlisle Companies Incorporated CSL . The assets were sold for $590 million, resulting in net proceeds of $580 million for Graco.

The divesture was primarily due to an ultimatum from the United States Federal Trade Commission (FTC) in October last year to divest the Liquid Finishing business assets within 180 days from receipt of the order. The contentious assets were part of the larger transaction via which Graco acquired several businesses from Illinois Tool Works Inc. ITW in Apr 2012.

The portfolio of divested assets as mandated by the FTC include related assets for 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 FTC, however, had allowed leading powder coating technology Gema to be a part of Graco.

Although disappointed, management was forced to abide by the order. During the interim period, the operations of this divested business were managed independently by experienced managers under the supervision of FTC-appointed trustee.

Headquartered in Minneapolis, MN, Graco is an industrial manufacturer that supplies technology and expertise for management of fluids in both industrial and commercial applications. Graco specializes in making fluid-handling equipment and systems, with one of its best known products being the spray gun used to apply paint to homes, businesses and cars. Its products are used in the manufacturing of a broad range of finished goods worldwide. The company has a steady revenue stream with a diversified global customer base.

Graco currently has a Zacks Rank #4 (Sell). Another better-ranked stock that currently looks promising in the industry includes Compass Diversified Holdings CODI , carrying a Zacks Rank #2 (Buy).

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GRACO INC (GGG): Free Stock Analysis Report

ILL TOOL WORKS (ITW): Free Stock Analysis Report

CARLISLE COS IN (CSL): Free Stock Analysis Report

COMPASS DIVERSF (CODI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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