Gardner Denver reportedly in talks about bid by SPX Corp. - Quincy Herald-Whig | Illinois & Missouri News, Sports

Gardner Denver reportedly in talks about bid by SPX Corp.

Posted: Updated:

BY DOUG WILSON
Herald-Whig Senior Editor

Gardner Denver Inc. officials would not comment Wednesday morning on reports that SPX Corp. has tendered a $4.2 billion purchase offer for its longtime competitor.

Gardner Denver stock closed at $73.68 on Tuesday. According to reports from Reuters, SPX is offering about $85 per share in ongoing talks. Gardner Denver shares were trading at about $55 per share in late October before initial reports about the potential purchase.

Nick Lamplough of the Joele Frank communications group said there is nothing to announce from Gardner Denver.

"I wouldn't be able to comment on any sale or pending sale," Lamplough said this morning.

In an earlier news release, Gardner Denver officials said they did "not intend to discuss or disclose developments with respect to this process until the board has approved a definitive course of action."

A merger could create an industrial machinery conglomerate with a market value of more than $7 billion. With a market value of about $3.5 billion, SPX is of similar size to Gardner Denver, which has a market capitalization of $3.35 billion. SPX could use both cash and its own shares to pay for a deal and has reached out to banks for financing to support the cash element of its offer, Reuters reported last week.

Talks of a sale or merger began July 28 after ValueAct Capital recommended a sale to boost shareholder profits. ValueAct made its request in a 13D/A document filed with the Securities and Exchange Commission. The documents are required when investors whose holdings exceed 5 percent of company ownership express their intentions.

ValueAct made its suggestion to the board of directors after what it called the "surprising resignation" of Gardner Denver CEO Barry Pennypacker on July 16. Chief Financial Officer Michael Larsen has been serving as interim CEO since Pennypacker's departure.

"The Gardner Denver Board of Directors and management team are committed to acting in the best interests of the company and all its shareholders, and we regularly engage with our shareholders. The board, in consultation with the company's financial and legal advisors, will carefully review and consider ValueAct's letter," a Gardner Denver release said at that time.

Goldman Sachs has been the company's financial adviser and was receiving offers on Gardner Denver starting in October or earlier.

Gardner Denver announced in August that it would shut down some of its European manufacturing facilities and trim its work force to reduce costs. That move came after the company reported a 36 percent drop in orders for the company's engineered products division — mostly petroleum and industrial pumps — during the second quarter.

The company's stock was considered a bargain when it was selling in the $55 range and market analysts predicted a purchase offer could come in around $70 per share. That led to a surge in GDI stock prices during the past 45 days.

Private equity firms Advent International, KKR & Co. LP and a consortium of TPG Capital LP and Onext Corp., made all-cash offers in the middle to high $70 per share range last week, according to Reuters. The Gardner Denver Board of Directors turned down the offers.

SPX manufactures equipment used in processing liquids, ranging from petroleum to dairy products and analysts said it would match up well with Gardner Denver's core products which include compressors, liquid ring pumps and blowers that are used in industrial, medical, petroleum, transportation and environmental fields.

In 2011, Gardner Denver had revenue of nearly $2.4 billion, up 25 percent from 2010 revenue.
In Quincy, Gardner Denver manufactures drilling and mud pump products used primarily in the petroleum industry. The company employs about 300 people locally, down from about 450 five years ago.

The company has been restructuring its global operations in recent years. Pennypacker eliminated the corporate manufacturing services department from Quincy operations in September 2008.

Gardner Denver's global corporate headquarters began moving in September 2010 to Wayne, Pa.

  • Local HeadlinesLocal HeadlinesMore>>

  • Interceptor SUVs becoming the standard frontline vehicle for QPD officers

    Interceptor SUVs becoming the standard frontline vehicle for QPD officers

    Tuesday, September 23 2014 9:17 AM EDT2014-09-23 13:17:21 GMT
    The Ford Interceptor SUVs in use by the Quincy Police Department will become the standard frontline vehicle of the department. Traffic Safety Officer Neal Meyer, the department's fleet manager, said the Interceptor in his mind has become the next Ford Crown Victoria, a staple vehicle in many departments. It has received rave review from officers.
    The Ford Interceptor SUVs in use by the Quincy Police Department will become the standard frontline vehicle of the department. Traffic Safety Officer Neal Meyer, the department's fleet manager, said the Interceptor in his mind has become the next Ford Crown Victoria, a staple vehicle in many departments. It has received rave review from officers.
  • Park District considering takeover of holiday light display

    Park District considering takeover of holiday light display

    Monday, September 22 2014 10:25 AM EDT2014-09-22 14:25:25 GMT
    If things go according to plan, the Quincy Park District could take over the Avenue of Lights holiday display in Wavering and Moorman parks as early as next year. Organizers with the Avenue of the Lights approached the Park Board last week hopeful the Park District would eventually take over the operation.
    If things go according to plan, the Quincy Park District could take over the Avenue of Lights holiday display in Wavering and Moorman parks as early as next year. Organizers with the Avenue of the Lights approached the Park Board last week hopeful the Park District would eventually take over the operation.
  • Consultant: Costs for potential new jail continue to climb

    Consultant: Costs for potential new jail continue to climb

    Tuesday, September 23 2014 8:47 PM EDT2014-09-24 00:47:56 GMT
    A consultant who previously worked with Adams County officials on feasibility studies in both 2004 and 2009 on whether a new jail should be built said Tuesday it would likely cost around $24 million for a new 184-bed...
    A consultant who previously worked with Adams County officials on feasibility studies in both 2004 and 2009 on whether a new jail should be built said Tuesday it would likely cost around $24 million for a new 184-bed...
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and Quincy Herald-Whig. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service and Mobile Privacy Policy & Terms of Service.