ILLINOIS TOOL WORKS INC. AND PREMARK INTERNATIONAL, INC. AGREE TO MERGER
GLENVIEW, Ill., and DEERFIELD, Ill., Sept. 9 -- Illinois Tool Works Inc.,
a diversified manufacturer of engineered components and specialty systems
worldwide, and Premark International, Inc., a manufacturer of commercial and
consumer products, announced today that they have entered into a merger
agreement that will combine their multibillion dollar businesses. Premark
shareholders will receive ITW stock at the closing with a market value of $55
per share for each of their Premark shares if the average closing market price
of ITW stock stays within a 15% plus or minus range of $78.03 per share during
the 20 trading days prior to the merger. If ITW's average closing market price
increases or decreases more than 15% from $78.03 during this period, Premark's
shareholders will receive ITW stock with a market value that is somewhat higher
or lower than $55 per share for each of their Premark shares. In no event,
however, will Premark shareholders receive more than .9181 or less than .5776 of
a share of ITW stock for each of their Premark shares.
The transaction is valued at approximately $3.4 billion. Premark shares closed
at $34.19 and ITW shares closed at $79.69 on Wednesday, Sept. 8, 1999. The
transaction is structured as a tax-free reorganization and will be accounted for
as a pooling of interests. At the current market price of ITW stock, the merger
is expected to be modestly accretive. As a result of the transaction Premark
will become a wholly owned subsidiary of ITW. Premark's share repurchase program
has been terminated.
With annual revenues of $2.7 billion and 19,000 employees, Premark is a leading
developer and manufacturer of brand name products that are marketed in more than
100 countries. The company operates in three business segments: food equipment,
decorative products, and consumer products. Key brand names within the Premark
line include Hobart, Vulcan, Traulsen, Wilsonart, Florida Tile, West Bend and
Precor.
Premark's Food Equipment Group serves restaurants, hotels, hospitals,
cafeterias, supermarkets, bakeries and delis. The Decorative Products Group
features laminates for kitchen countertops, bathroom vanities, cabinets, office
equipment and furniture and store fixtures. The Consumer Products Group is made
up of small electrical appliances, direct to home cookware, and fitness
equipment.
"Over the years, Premark has built a distinct reputation for developing brand
name products that are leaders within its respective markets," said W. James
Farrell, ITW's chairman and chief executive officer. "This combination of strong
product development and marketing know-how would make Premark an ideal addition
to ITW's increasingly diversified line of products, particularly in our
construction products and specialty systems areas."
According to James M. Ringler, Premark's chairman and chief executive officer,
"This transaction enhances our prospects for accelerated progress in improving
growth and returns. It also optimizes shareholder value and allows our
stockholders to participate in the future growth of ITW, one of the world's
leading diversified manufacturing companies." It is anticipated that Ringler
will assume a senior management role at ITW upon completion of the merger.
This transaction is subject to customary regulatory reviews and approval by the
shareholders of Premark and depending on the number of ITW shares to be issued,
the shareholders of ITW. The Board of Directors of both companies have approved
the transaction.
ITW is a $5.6 billion diversified manufacturer of highly engineered components
and industrial systems. The company consists of more than 400 decentralized
operations in 36 countries and employs approximately 29,000 people.
Contacts: ITW: John Brooklier, 847-657-4104
Premark: Isabelle Goossen, 847-405-6218
Premark International, Inc.
Fact Sheet
Overview
Premark International is a multibillion-dollar manufacturer of commercial
and consumer products which comprise three segments:
o Food Equipment ... commercial food equipment for restaurants, hotels,
hospitals, cafeterias, supermarkets, bakeries and delis. 52% of '98
sales; 47% of '98 operating income.
o Decorative Products ... laminates for kitchen countertops, bathroom
vanities, cabinets, office equipment, and furniture and store fixtures
as well as ceramic tile for residential and commercial usage. 36% of
'98 sales; 40% of '98 operating income.
o Consumer Products ... small electrical appliances and direct to home
cookware; fitness equipment for specialty retailers. 12% of '98 sales;
13% of '98 operating income.
Key Brands
o Hobart, Vulcan, Traulsen, Wilsonart, Florida Tile, West Bend, Precor
Financial Highlights (dollars in millions except per share amount)
1998 1997 % Increase
Net Sales $2,739.1 $2,406.8 13.8%
Operating Income 219.6 174.7 25.7
Net Income 136.1 103.8 31.2
Net Income Per Share (Diluted) 2.11 1.59 32.7
Selected Segment Data (dollars in millions)
1998 1997 % Increase
Net Sales
Food Equipment $1,411.2 $1,286.0 9.7%
Decorative Products 996.0 790.2 26.0
Consumer Products 331.9 330.6 0.4
Total $2,739.1 $2,406.8 13.8%
SOURCE: Illinois Tool Works Inc.