Kohlberg Kravis Roberts (KKR) is to acquire industrial machinery maker Gardner Denver in a transaction valued at approximately USD3.9bn, including the assumption of debt.
Under the terms of the merger agreement, KKR will acquire all of the outstanding shares of Gardner Denver common stock for USD76 per share in cash. This price represents a premium of approximately 39 per cent to Gardner Denver’s share price on 24 October 2012, the day before the company confirmed that it had begun to explore strategic alternatives.
The merger is subject to approval from Gardner Denver’s shareholders, regulatory approvals and other customary closing conditions. The board of directors of Gardner Denver unanimously approved the merger agreement and recommends that Gardner Denver shareholders vote in favour of the transaction. The transaction is currently expected to close in the third quarter of 2013.
“After a thorough review of strategic alternatives to enhance shareholder value, we are pleased to provide our shareholders with immediate and substantial cash value representing a significant premium to our unaffected share price,” says Michael M Larsen, Gardner Denver’s president and chief executive officer. “In addition to the significant value to our shareholders, Gardner Denver will benefit from KKR’s track record of execution as the company continues to pursue its strategy focused on driving organic growth, particularly in underserved markets, and building new revenue streams in the aftermarket and through the introduction of innovative customer-centric solutions across its businesses. We anticipate this transaction will create opportunities to accelerate the operating initiatives already underway and we are confident that it will also be beneficial for our employees, customers and all other stakeholders.”
Pete Stavros (pictured), member of KKR and head of the firm’s industrials investment team, says: “Gardner Denver is an outstanding business with a rich heritage of manufacturing excellence, innovation and quality that spans well over 100 years. The company has an impressive group of talented and dedicated employees, and we look forward to working closely with them to drive future growth and value. The long-term future of Gardner Denver is bright.”
The transaction is being made through KKR’s investment funds.
