Carlyle Said to Plan $2.5 Billion of Debt for Illinois Tool Unit

Carlyle Group LP (CG), the Washington-based private-equity firm, is planning about $2.5 billion of debt financing for its buyout of Illinois Tool Works Inc. (ITW)’s industrial-packaging unit, according to a person with knowledge of the deal.

The debt consists of $1.6 billion to $1.7 billion of first-lien loans and $800 million to $900 million of high-yield bonds, said the person, who asked not to be identified because the transaction is private. Carlyle obtained financing commitments from a group of banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to a statement yesterday.

Michael DuVally, spokesman for Goldman Sachs, and Tasha Pelio, a spokeswoman for JPMorgan, declined to comment. Reuters earlier reported details of the deal financing.

Carlyle agreed to purchase Illinois Tool’s industrial packaging business for $3.2 billion, expecting to complete the buyout in the middle of this year, according to the statement. Carlyle will finance the deal in part with equity from the $13 billion U.S. buyout fund it closed in November, the firm said.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.