Illinois Tool Back at it

By Douglas A. McIntyre Published Nov 27, 3:38AM EST

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From The Average Joe Investor

I can’t say that I really have a whole heck of a lot to say about this, but I couldn’t help but notice that Illinois Tool (NYSE: ITW) is acquiring a company called Ark-Les. If you recall, Illinois Tool hit my radar when they bought out the software company Click Commerce a little while back.

I was somewhat baffled at the Click acquisition, but it appears that the company is sticking to more of their core competency with this most recent purchase. The 69-year-old company describes itself as "a leading supplier of engineered user interface solutions to the appliance, telecommunications, motor control, data processing and controls markets." Illinois Tool has declined to disclose the particulars of the deal, but Ark-Les is expected to become a subsidiary of Illinois, and work among its 700 other business units producing some of the guts for appliances and autos.

In a related note, Illinois also released earnings on Wednesday, reporting 10% operating revenue growth for Q3. Of course, only 2% of this was from organic growth, while 8% was from acquisitions. While I tend to be cynical towards companies getting most of their growth from acquisitions, I think Illinois could be a candidate for more due diligence. They get a nice return on equity, are trading at a fairly low multiple, and have been pretty consistently getting cash back to shareholders through dividends and share buybacks.

Though 20 Wall Street analysts cover it, it’s not exactly a stock on the tip of everyone’s tongue. A hidden beauty? Any opinions out there?

-AvgJoe

http://theaveragejoeinvestor.blogspot.com/

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.