Gardner Denver IPO could top $1 billion

Proceeds to be used to pay down debt

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Milwaukee-based Gardner Denver Holdings Inc. could raise more than $1 billion from its initial public offering and plans to use the proceeds to pay off $910.3 million in debt.

Gardner Denver president and CEO Vicente Reynal.
Gardner Denver president and CEO Vicente Reynal.

The company, which makes flow control and compression equipment for industrial, energy and medical markets, announced today it would offer 41.3 million shares of its common stock, with an initial price expected to be between $23 and $26 per share. The range would put the gross proceeds from the offering at $949.9 million and $1.24 billion if underwriters purchase additional shares available to them.

Gardner Denver has applied to list its shares on the New York Stock Exchange under the symbol “GDI.” A company representative did not immediately return a message regarding when the company would begin trading.

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The offering was first announced in securities filings in late February. At the time, Reuters estimated the offering would value the company at $6 million to $7 million, including debt. The midpoint of the expected price range puts the company value at $6.54 billion.

Gardner Denver was acquired by private equity firm KKR & Co. in July 2013 for $3.74 billion. The deal valued the company at $3.9 billion, including debt, and also made the company private. KKR plans to continue owning a majority of the company’s shares following the IPO.

After the acquisition, former Bucyrus and current Rev Group chief executive Tim Sullivan was named CEO. Sullivan helped move the company’s corporate headquarters from suburban Philadelphia to Milwaukee in 2014 before resigning.

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The company plans to use the proceeds of the public offering to redeem $575 million in 6.875 percent senior notes that were originally related to the KKR acquisition and are due in 2021. Funds will also be used to prepay $335 million in borrowings under the company’s senior secure dollar term loan facility.

Goldman Sachs & Co. LLC, Citigroup, KKR Capital Markets, UBS Investment Bank, Simmons & Company International (Energy Specialists of Piper Jaffray), Deutsche Bank Securities, Baird, Credit Suisse and Morgan Stanley are acting as bookrunners of the offering, and William Blair, Stifel, HSBC, Macquarie Capital, Credit Agricole CIB and Mizuho Securities are acting as co-managers of the offering.

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