Illinois Acquires Car Care Business - Analyst Blog

Illinois Tool Works Inc. (ITW), in an effort to expand its car care solutions business globally, announced an agreement to acquire Shell SOPUS Products' car care business for an undisclosed amount. The accomplishment of the deal is subject to the approval of the regulatory authorities.

The assets acquired are expected to improve the vehicle owner's windshield visibility, protecting and cleaning vehicles, and improving vehicle performance. It includes brands such as Rain-X, Black Magic and Gumout, among others. The transaction is expected to be consummated in 2011.

Illinois Tool Works, operating through 800 business units in 57 countries, is one of the leading manufacturers of industrial products and equipment. We believe that the company's growth stems from its ability to develop new and improved products as well as broadening the range of application of established products. Improvising and developing new methods, processes and equipment along with acquisitions give the company a major boost to profitability.

Exiting third quarter 2010 by completing 16 acquisitions for a cost of $374 million, the company received annualized revenue of $399 million. The company aims to achieve revenue of $500–$700 million in fiscal year 2010 through acquisitions.

Moreover, new products are designed to be more cost-effective by eliminating steps in manufacturing processes, reducing the number of parts in an assembly, or by improving the quality of customers'  assembled products.

The company's prime competitors include the likes of Cooper Industries plc (CBE), General Electric Co. (GE), and Manitowoc Co. Inc. (MTW). We currently maintain our Neutral recommendation on the stock, which is in line with the Zacks #3 Rank (Hold).