Kohlberg Kravis Roberts & Co. LP, the New York buyout firm headed by takeover and shutdown expert Henry Kravis (past targets include Safeway, Regal theaters, Toys R Us), says it will pay $76 a share, or about $3.7 billion, and take on around $200 million in debt, to buy Gardner Denver Inc., the industrial pump-maker that moved its headquarters to Wayne from the Midwest three years ago and has been shopping itself to buyers since chief executive Barry Pennypacker, a Montgomery County native, left suddenly last summer.
The KKR offer is nearly 40 percent above Gardner Denver's recent trading price, but well below the $91 a share high from 2011. Gardner Denver profits peaked that year, at $280 million, on record sales of $3.9 billion, nearly twice the level of 2009, as U.S. energy production rose. Profits slipped to $264 milllion, on sales of $3.4 billion, in 2012.
The deal still needs approval from Gardner Denver investors. Major shareholders include the BlackRock, T. Rowe Price and Vanguard investment groups and activist investor ValueAct Capital, which bought into the company last year and called on the board to consider a sale.
"A thorough review of strategic alternatives" brought Gardner Denver's boss and board to back the latest KKR offer, and the buyer will help expand sales of new and used pumps and other equipment, partly through "innovative customer-centric solutions," in ways "beneficial for our employees, customers and all other shareholders," chief executive Michael M. Larsen said in a statement.
KKR industrial chief Pete Stavros called Gardner Denver "an outstanding business with a rich heritage," promised to work closely with current staff, and added that "the long term future of Gardner Denver is bright."