ITW Bakes Another One

Illinois Tool Works Inc. (ITW) announced the acquisition of the Baking Equipment Business Peerless Machinery Corp. The transaction is worthy of a press release. But no details have been announced. Price or terms.

So what is an investor to do with this tid bit of information. If ITW wants you to believe that their strategy of investing in wholesale food and baking equipment is financially attractive they need to put some cards on the table to back it up. The comment in the press release "The Peerless Group has grown into one of the most diverse suppliers serving the bread and roll, cake and snack and cookie and cracker markets." is inadequate.

At approximately the same time ITW announced that it will report five businesses that were divested in 2007 and 2006 or held for sale at the end of 2007 as discontinued operations. As a result, the operating results for these construction,
consumer packaging and automotive machinery and components businesses will be
reclassified as discontinued operations for both the fourth quarter and
full-year 2007, and related prior periods.

They continue to claim "The reclassification for discontinued operations has no impact on the Company's current forecasted net income per share or income from continuing operations per share for the fourth quarter of 2007."

But when management buys something they do not have to explain. ITW needs more clarity. When you boast 750 business units, approximately 55,000 employees over close to 50 countries you need to go the extra mile in explanations.