UPDATE 1-KKR makes $3.7 billion bid for Gardner Denver -sources

Thu Feb 21, 2013 6:50pm EST

By Greg Roumeliotis and Soyoung Kim

NEW YORK Feb 21 (Reuters) - Private equity firm KKR & Co LP has submitted an offer of $75 per share for Gardner Denver Inc, valuing the industrial machinery maker at close to $3.7 billion, two people familiar with the matter said on Thursday.

The offer, submitted late on Thursday to meet a 1700 Eastern Time deadline, puts KKR in the pole position to buy the Wayne, Pennsylvania-based company, after sources told Reuters that other private equity bidders have abandoned the process.

KKR is the only private equity firm that has secured committed financing from banks for making the bid, the people said. Advent International and the team of TPG Capital and Onex Corp, which had earlier considered a bid, are no longer involved, one of the people said.

The people requested anonymity because details of the sale process are confidential. Gardner Denver and KKR declined to comment. TPG, Onex and Advent did not immediately respond to requests for comment.

Gardner Denver shares closed at $67.47 on Thursday, giving it a market value of just over $3.3 billion.

KKR's $75 per share offer compares to the first-round bids Gardner Denver had received in the $75 to $80 per share range from private equity bidders in November, the people said. As bidders carried out advanced due diligence, they became more concerned about declining orders at the company, the people added.

Gardner Denver, which makes compressors, pumps and vacuum products for industrial uses, decided to explore a sale late last year following months of pressure from activist investor ValueAct Capital LLC, which acquired a roughly 5 percent stake.

The company went back to private equity bidders after talks with industry rival SPX Corp broke down at the end of last year amid investor skepticism about the logic of such a merger. SPX was negotiating a deal at $85 per share, a person familiar with the matter told Reuters at that time.

Bloomberg News reported on KKR's bid earlier on Thursday.

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