KKR has taken advantage of rival buyout houses walking away from buying industrial equipment maker Gardner Denver by agreeing a $3.9bn deal for the business.
The US private equity giant has agreed to pay $76 per share for Gardner Denver’s common stock, which represents a 39 per cent premium compared to its share price on October 24, the day it announced it had begun to explore a potential sale.
KKR emerged as a bidder in late February after Advent International and a partnership between Onex Corp and TPG Capital had pulled away from a deal amid disagreements over the due-diligence process.
It was thought the firm had offered about $3.68bn for the business at the time. All four buyout firms had been circling Gardner Denver since trade buyer SPX brought an end to its interest in January.
Blackstone and Bain Capital previously took part in the auction but did not make it through to the second round, in a sale that was expected to fetch closer to $3.5bn.
The company’s board of directors has unanimously approved the merger agreement and recommended shareholders vote in favour of the deal, which it expects to close in the third quarter of 2013.
KKR industrial investment team head Pete Stavros said, “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.”
Gardner Denver suffered declining share price and revenues through the first half of 2012, but jumped about 50 per cent in October when rumours of a sale began to circulate.
The company’s shares were trading at $74.68 each at 10.30am EST.
Gardner Denver was founded in 1859 and makes industrial compressors, blowers, pumps and fuel systems.
The US-based business has 40 manufacturing facilities globally and posted revenues of $2.4bn last year, about two-thirds of which were generated abroad.
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