KKR to buy equipment maker Gardner Denver for $3.7 billion

Posted: March 10, 2013

Gardner Denver Inc., an industrial equipment maker with a small headquarters office in Wayne, agreed to be purchased by private-equity firm KKR & Co. for about $3.7 billion after KKR raised an earlier offer.

KKR, run by Henry Kravis and George Roberts, will pay $76 a share for Gardner Denver, the companies said Friday in a statement. That's a 39 percent premium to the price on Oct. 24, the day before the company announced it was exploring a sale. KKR last month offered $75 a share, Bloomberg News reported Feb. 21.

"The long-term future of Gardner Denver is bright," Pete Stavros, head of KKR's industrials team, said in the statement. The deal, expected to close in the third quarter, is valued at $3.9 billion, including the assumption of Gardner Denver's debt.

Gardner Denver said in October that it was reviewing options including a sale after ValueAct Holdings L.P., which disclosed in July that it had become the third-largest investor, pressed for a deal as "the most effective way to deliver maximum value to shareholders."

The sale comes after rival SPX Corp. and private-equity firms Advent International Corp. and the team of Onex Corp. and TPG Capital walked away from takeover talks, people familiar with the matter have said.

Shares of Gardner Denver closed Friday up 1.2 percent, or 89 cents, to $74.74.

The company makes compressors, pumps, and other products for manufacturers and energy exploration firms. Other suitors included private-equity firms CCMP Capital Advisors L.L.C., Bain Capital L.L.C., and Blackstone Group L.P.

The pump maker's market has faced more competition amid a historic boom in natural gas production, and Gardner Denver has focused on boosting margins through measures such as restructuring its European operations.

Gardner Denver had 2012 revenues of $2.36 billion and about 6,400 full-time employees as of January. The company employs about two dozen people in its Chester County headquarters.

In addition, it operates factories for its Engineered Products Group in Altoona and Bentleyville, both in Western Pennsylvania.

Inquirer staff writer Mike Armstrong contributed to this article.

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