S&P may cut Illinois Tool Works

Standard & Poor's said it placed the AA corporate credit rating and senior unsecured ratings on Illinois Tool Works Inc. on CreditWatch with negative implications after it agreed to acquire Enodis plc for $2.3 billion, including $210 million of Enodis' debt.

The agency affirmed the A-1+ commercial paper rating.

S&P said the acquisition of Enodis is expected to be funded primarily with debt and would likely result in increases in financial leverage to levels above what is expected at the current rating.

Although the company's ability to generate free cash flow is strong, its debt has grown over the past two years because of share buybacks, the agency said.

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