Gardner Denver Sale Said to Falter Amid Management Reluctance
Two bidders have walked away from Gardner Denver Inc. (GDI) because the company was slow to assist them with due diligence as they pursued the industrial-equipment maker, said people with knowledge of the situation.
A joint offer by Onex Corp. (OCX) and TPG Capital and a separate bid from Advent International Corp. were withdrawn in part because the firms wanted more information and more time to study the company than management would allow, said one of the people, who asked not to be named because the process is private. KKR & Co. (KKR) meanwhile hasn’t decided if it will make a bid by today’s deadline, another person said.
Gardner Denver said in October it had hired Goldman Sachs Group Inc. to help it find a buyer and invited interest from buyout firms after talks with rival SPX Corp. collapsed in December. While SPX planned to offer about $85 a share, early bids from private-equity firms were for about $73 to $75 a share, people familiar with the situation have said. Wayne, Pennsylvania-based Gardner Denver has sought bids from private- equity firms for about $78, people have said.
Vikram Kini, a spokesman for Gardner Denver, and Tiffany Galvin, a spokeswoman for Goldman Sachs, didn’t return calls seeking comment. Caroline Luz, a spokeswoman for TPG at Owen Blicksilver Public Relations, and Emma Thompson, a spokeswoman for Onex, didn’t return calls seeking comment. A representative for Advent didn’t respond to a request for comment.
Gardner Denver fell 3.5 percent to $66.58 yesterday in New York, for a market capitalization of about $3.3 billion. The company makes compressors, pumps and other products for industries including manufacturing and energy exploration.
While some of the private-equity firms wanted to hire consultants to look at Gardner Denver before proceeding, they were also wary of making that investment only to learn that management wanted more than they were willing to pay, said the people familiar with the matter.
Larsen was named permanent CEO in November. He was given the job on an interim basis in July after former CEO Barry Pennypacker left the company.
Pennypacker’s departure was one of the reasons cited by San Francisco-based activist investment fund ValueAct Capital Management LLC when it encouraged the board to sell the company in July. ValueAct is the third-largest shareholder in Gardner Denver with 5.1 percent of the stock as of Dec. 31, according to data compiled by Bloomberg.
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