ITW adds bakery equipment maker to food processing stable

ITW already owns more than 50 food equipment companies in 23 countries, including brands like Hobart, Vulcan-Hart and Wolf.

Food equipment generated nearly $2 billion in revenue for ITW in 2006, or 12 per cent of the company's total revenue of $14.1 billion.

Under the new deal, announced on Monday, it will expand its sales in the wholesale baking industry.

Terms of the transaction were not disclosed.

Privately held Peerless has annual revenue of about $40 million, according to a statement from ITW.

It makes dough mixers, bread dividers, dough handlers, and other processing equipment used to produce cookies, bread, rolls, crackers and cakes.

It claims to be the only US-based wholesale bakery equipment supplier with ISO certification and one of two globally who have reached this level.

ITW said it will continue to operate the Ohio-based Peerless as a separate business under the same brand name.

"Peerless has an excellent reputation in the industry and is a good fit in ITW 's portfolio of food equipment businesses," said Marc Fooksman, a group president of ITW.

"The acquisition of Peerless will help support the continued growth of the food equipment group, specifically in the wholesale baking industry."

Last year ITW added Avery Berkel, the food retail weighing business of Avery Weigh-Tronix, to its food equipment group.

Food equipment is generating good earnings growth at the group.

In its third quarter results, ITW said operating income growth of 7.3 per cent in North America was "primarily due to base income contributions from welding and food equipment".

In international markets, a 10 per cent increase in operating income was also attributed to food equipment and weighing.

While bakery is considered a mature segment in North America and Europe, the breakdown of traditional eating patterns in recent years has boosted demand for baked goods to eat on-the-go.

There is also strong growth in baked foods for healthy diets with added fibre and new portion sizes with lower calories.

On top of this, the bakery sector is benefiting from a move towards high quality premium or luxury food, including artisan-style bread and indulgent cookies.

Bakery and cereals sales in the United States and Europe are set to grow by over 10 per cent between 2005 and 2009, according to a report on the sector by market analysts at Datamonitor.

Sales from the category are slated to reach $216.7 billion.