Graco announced April 2 that it has closed on its $650 million acquisition of the Illinois Tool Works’ finishing businesses, reaching an agreement with the U.S. Federal Trade Commission that allows for closing of the powder finishing business while the FTC investigates and considers a settlement proposal from Graco for the liquid finishing side of Gema’s business.
A week earlier, the FTC issued an order for Graco to hold the liquid finishing assets separate from the powder finishing and other Graco businesses while the FTC investigates and considers a settlement proposal from Graco. Although the liquid businesses are now owned by Graco, they will be run independently by existing management under the supervision of a trustee who reports directly to the FTC.
At the completion of its review, the FTC will issue a final decision and order that will identify the products, businesses or assets that Graco will be required to divest. The divestiture must be completed in the 180 days following the issuance of the final decision and order and may include up to all of the liquid finishing businesses.
The acquisition includes complementary powder and liquid finishing equipment operations, technologies and brands. In powder finishing, Graco has added Gema, and approximately one-third of the purchase price is expected to be allocated to this business. In industrial liquid finishing, the acquisition includes Binks spray finishing equipment, DeVilbiss spray guns and accessories, Ransburg electrostatic equipment and accessories and BGK curing technology.
“The addition of the Gema Powder Finishing business to Graco’s existing finishing operations is highly strategic and complementary,” says Patrick McHale, Graco’s President and Chief Executive Officer. “It allows the Company access to attractive end markets; the global distribution base of Gema is strong and growing; the emerging market exposure is highly attractive; and the brand name is well established with end users as a high quality, technological leader.”
“This is going to be an extraordinarily exciting time for all of us as we work to make our successful business even better,” says Claudio Merengo, Gema Group President. “This change in our corporate ownership will enhance our ability to provide high quality products and continued excellent service.”
Over the next several months a transition will occur as marketing, promotional, and product materials are integrated with the new company name, Gema.