Gardner Denver receives purchase offer just before Thursday deadline

Posted: Feb. 22, 2013 7:30 am Updated: Mar. 15, 2013 8:15 am

Herald-Whig Senior Writer

Gardner Denver received a bid offer just in time to meet its Thursday deadline when KKR & Co. offered $75 per share.

Bloomberg News announced the $3.68 billion offer just after midnight Eastern time.

Officials at Gardner Denver's Wayne, Pa., headquarters were in a meeting early Friday and did not immediately return calls for comments. They later declined to comment.

The company, founded in 1859, has about 300 workers in Quincy, as well as 40 manufacturing facilities around the world. The company manufactures pumps, compressors and other highly engineered equipment used in the petroleum industry and other industrial procedures. The company had revenues of $2.4 billion in 2011.

KKR & Co. is a New York-based private-equity firm that buys out companies it sees as good investments. If Gardner Denver accepts the KKR offer, it will end months of offers and counter-offers for the company.

The last-minute purchase offer surprised some analysts.

"We actually felt as though the clock was sort of ticking on this acquisition," William Bremer, a New York-based analyst at Maxim Group LLC told Bloomberg.

Bremer had cut his rating on Gardner Denver shares to hold on Thursday. After hearing news of the KKR offer, Bremer described Gardner Denver as "a fantastic company ... that is definitely top tier in their space, not just in products but also distribution."

Gardner Denver is scheduled to report fourth-quarter earnings today.

It's still possible that Gardner Denver could see more bids, although an offer higher than $78 a share is unlikely, Bremer said.

Barry Pennypacker resigned as Gardner Denver's CEO on July 16. ValueAct Capital, which held 5 percent of the company's shares, then called for the board of directors to sell Gardner Denver in order to boost shareholder value.

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 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 last year.

On Oct. 25, the company confirmed that it had hired Goldman Sachs Group Inc., to study options including a sale or merger.

SPX Corp., a competitor, offered $85 per share for Gardner Denver in December, but withdrew from the deal when it could not secure financing at favorable terms.

Gardner Denver stock, trading as GDI, closed at $67.47 on Thursday. The KKR bid was 11 percent higher than that closing price. GDI stock later rose to $70.78 in extended trading.