Gardner Denver Said to Cut Rate on $1.8 Billion KKR Buyout LoanKrista Giovacco
Gardner Denver Inc., an industrial equipment maker, reduced the rate on a $1.8 billion term portion of the financing backing its buyout by KKR & Co., according to a person with knowledge of the matter.
The seven-year loan will pay interest at 3.5 percentage points more than the London interbank offered rate, down from 4 percentage points to 4.25 percentage points initially proposed, said the person who asked not to be identified because terms are private. The lending benchmark will have a 1 percent minimum.
KKR, the private-equity firm run by Henry Kravis and George Roberts, agreed to buy Gardner Denver for about $3.7 billion. The deal is valued at about $3.9 billion, including the assumption of Gardner Denver’s debt.
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 a $525 million term piece denominated in euros, also due in seven years, and a $400 million revolving line of credit that expires in five years, the person said.
Lenders must let the banks know by tomorrow at 12 p.m. in New York if they will participate in the dollar-denominated bank debt, the person said. The loan is being offered to investors at 99 cents on the dollar.
Gardner Denver, based in Wayne, Pennsylvania, makes compressors, pumps and other products. The deal is expected to close this quarter.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
Vikram Kini, a vice president in investor relations at Gardner Denver, didn’t immediately return a telephone call seeking comment.