Illinois Tool Returns to Core Competency With Latest Acquisition

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 (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?

ITW 1-yr chart: