Gardner Denver Inc., the industrial equipment maker that KKR & Co. is acquiring, set the rate on $2.73 billion of loans it’s seeking to support the buyout, according to a person with knowledge of the transaction.
The company’s proposing to pay interest at 4 percentage points to 4.25 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark on a $1.8 billion term loan due in seven years, said the person, who asked not to be identified because terms are private.
KKR & Co., the private-equity firm run by Henry Kravis and George Roberts, agreed to buy Wayne, Pennsylvania-based Gardner Denver for about $3.7 billion. The deal is valued at about $3.9 billion, including the assumption of Gardner Denver’s debt.
A $525 million portion denominated in euros that will expire in seven years may pay interest at 4.25 percentage points to 4.5 percentage points more than Euribor with a 1 percent floor on the lending benchmark, the person said. Both loans are offered to investors at 99 cents.
UBS AG, Barclays Plc, Citigroup Inc., Deutsche Bank AG, Mizuho Bank Ltd, Royal Bank of Canada, Macquarie Group Ltd. and HSBC Holdings Plc are arranging the financing, which includes a $400 million revolving line of credit that comes due in five years.
Vikram Kini, a vice president in investor relations at Gardner Denver, didn’t immediately return a phone call seeking comment.
In a revolving line of credit, money may be borrowed again once it’s repaid; in a term loan it can’t.