By DOUG WILSON
Herald-Whig Senior Writer
Gardner Denver Inc. is down to one potential buyer on the eve of a Thursday deadline for purchase offers, according to the Wall Street Journal and other sources.
KKR & Co. is the last private-equity firm considering whether to bid on the manufacturer of pumps, compressors and other highly engineered equipment, according to published reports.
Gardner Denver was valued at $3.4 billion Wednesday and is being advised by Goldman Sachs as it seeks buyers. This week's deadline was established to give potential buyers a timeline for completion. Other equity firms -- TPG, CCMP Capital Advisors and Onex Corp. -- had been listed among possible suitors for Gardner Denver, but they dropped active pursuit.
An analysis released last week shows that Gardner Denver has other options for boosting shareholder value if no buyer is found.
MKM analyst Joshua Pokrzywinski said canceling the sale process might lead to "temporary disappointment" but could be countered with borrowing and stock repurchases.
"With a leveraged recapitalization emerging as another option, a simultaneous announcement that the company is no longer for sale, but instead undertaking a sizable repurchase program, should be positively received and at least partially mitigate the initial negative reaction," Pokrzywinski told StreetInsider.com.
Private-equity firms, which buy companies they believe can be more valuable either through restructuring or changing market conditions, had considered bids of $73 to $75 a share late last year for Gardner Denver. SPX Corp., a Gardner Denver competitor, had planned to bid $85 a share for the company last year before it was unable to get the loan terms it sought.
Gardner Denver officials have consistently declined to comment on purchase talks or the layoffs of more than 30 people from the Quincy factory in January.
Gardner Denver employs about 300 people in Quincy, manufacturing industrial machines such as pumps and machines used in the petroleum sector and for other industrial purposes.
Talks of a sale or merger began July 28 after ValueAct Capital recommended a sale to boost shareholder profits. 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 was named CEO after Pennypacker's departure.
Gardner Denver announced in August that it would shut down some of its European manufacturing facilities and trim its workforce 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 last year.
Gardner Denver stock opened Wednesday at $68.48 a share, Its 52-week low is $45.54, with a high of $76.57.
MKM Partners has a "buy" rating for GDI stock, with a target price of $82.