By Soyoung Kim and Greg Roumeliotis
NEW YORK (Reuters) - At least six major private equity groups are competing to buy the industrial packaging segment of Illinois Tool Works Inc
Carlyle Group LP
The people asked not to be named because details of the auction are not public. Illinois Tool Works did not immediately respond to requests for comment, while representatives for the buyout firms either declined to comment or did not respond to requests for comment.
Illinois Tool Works announced in September it was initiating a process to sell the industrial packaging unit, as the conglomerate continues to streamline its diversified business lines.
The packaging business, which had revenue of about $2.4 billion in 2012, makes steel, plastic and paper products used for bundling, shipping and protecting transported goods, with brands including Signode, Strapex, Angleboard and Mima.
"After carefully considering the underlying value of the business, the level of preliminary interest from potential buyers and a favorable debt market, the company and our board of directors have opted to initiate a sale process for the industrial packaging segment," Chief Executive Scott Santi said at the time of the announcement.
The Glenview, Illinois-based company makes a variety of items, including restaurant equipment, construction products, electronic components and auto parts. It has been trying to exit less profitable markets and shed businesses with commodity-type product lines.
Private equity firms, chasing deals to deploy capital in a low interest rate environment, have shown a strong appetite for large units being carved out of companies seeking to exit non-core businesses.
In the healthcare sector, a consortium of Blackstone Group LP
(Reporting by Soyoung Kim and Greg Roumeliotis in New York; Editing by Richard Chang)