The Federal Trade Commission issued a final order Monday for Graco Inc. to divest the liquid-finishing businesses it acquired in 2012 from Illinois Tool Works.
Graco, the Minneapolis-based maker of industrial pumps and sprayers, bought the liquid and powder-coating assets of Illinois Tool Works Inc. in April 2012 for $650 million.
Just a month later, the government agency issued a preliminary finding that Graco's control over the liquid-handling equipment portion of Illinois Tool Works would be "anti-competitive." Since then the entity has been operating separately under the FTC.
Monday's final order said that Graco must sell the business within 180 days. Graco is allowed to keep the Gema powder-finishing business.
"While disappointing, the order from the FTC has been expected," Graco CEO Patrick McHale said in a statement. "We are prepared to complete the sale within the time frame allowed by the decision and order."
Graco has been waiting for the FTC's final order for more than two years. But complications from pre-existing supply contracts delayed the FTC's final ruling until now, said Elizabeth Piotrowski, spokeswoman for the FTC's Bureau of Competition. The supply-contract issues have now been resolved and so the divestiture can go through, she said.
The assets Graco must divest include Binks spray finishing equipment, DeVilbiss spray guns and accessories, and Ransburg electrostatic equipment and accessories and BGK curing technology. In 2013, combined assets produced about $279 million in sales.
The liquid-finishing business was the larger of the two. However, the FTC was concerned the deal would have merged two of the nation's largest manufacturers of electric-circulating paint pumps.
Dee DePass • 612-673-7725
