| NEW YORK
NEW YORK Nov 28 Industrial machinery maker SPX
Corp is pursuing a potential merger with rival Gardner
Denver Inc, competing with three private equity groups
that are also bidding for the company, five people familiar with
the matter said.
Private equity firms Advent International, KKR Co & LP
and the partnership of TPG Capital and Onex Corp
are the buyout suitors involved in the second round of
bidding for Gardner Denver, the people said this week.
Reuters reported on Nov. 15 that the company had
short-listed a small group of bidders, including KKR and the
TPG-Onex pair, for the next round of bidding after reviewing
Gardner Denver, which has a market value of roughly $3.3
billion, is expected to negotiate with the parties through the
year-end for a potential deal early next year, the people said.
Gardner Denver and the private equity firms have declined to
comment on the sale process. SPX did not immediately respond to
requests for comment.
The Wayne, Pennsylvania-based company, which makes pumps and
vacuum products for industrial uses, said last month that it is
exploring a potential sale, confirming a Reuters report.
It remains to be seen if SPX could eventually prevail in the
auction, as Gardner Denver's valuation has become expensive for
publicly traded industry competitors that have seen their own
stock prices languish over the past year.
In July, United Technologies Corp sold its Hamilton
Sundstrand industrial businesses to Carlyle Group LP and
BC Partners for $3.46 billion, following an auction that
attracted interest from several industry players including SPX
and Dover Corp.
Shares of Gardner Denver have risen nearly 25 percent since
the company said on Oct. 25 it was exploring a potential sale.
The stock was up 1.3 percent to $68.71 on the New York Exchange
Gardner Denver has grappled with lower demand for petroleum
and industrial pumps, which pressured its engineered products
group. That group reported a 20 percent drop in revenue in the
Some buyers expect Gardner Denver's earnings to decline
further next year, making it tough for them to bid much higher
on the company's current share prices, which have already
rallied on the prospects of a takeover, sources said.
The auction of Gardner Denver follows months of pressure
from activist investor ValueAct Capital LLC, which has been
calling for a sale of the company after acquiring a stake of
roughly 5 percent.