KKR near purchase deal with Gardner Denver

Posted: Mar. 4, 2013 7:23 pm Updated: Mar. 25, 2013 7:48 pm

Herald-Whig Senior Writer

KKR & Co. LP and Gardner Denver Inc. are getting close to a purchase agreement for the industrial machinery maker, according to Reuters.

KKR is a private equity firm that offered $75 per share for Gardner Denver on Feb. 21. That would value the company at $3.7 billion. They have been going over other details in talks since that time, according to unnamed people familiar with the negotiations, Reuters reported on Monday afternoon.

Shares of Gardner Denver, which were down 1 percent on Monday before the news, rose 3.6 percent to $73.62 on the New York Stock Exchange, valuing the company at around $3.6 billion.

Gardner Denver, 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 2012.

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 counteroffers for the company.

The talk of a buyout began in July after Barry Pennypacker resigned as Gardner Denver's CEO. ValueAct Capital, which held 5 percent of the company's shares, then called for the board of directors to sell Gardner Denver 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 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.

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