Shares of Gardner Denver Holdings (NYSE:GDI) rose on Monday after The Wall Street Journal reported the provider of compressors, blowers, and vacuum pumps is close to a deal to merge with a division of Ingersoll-Rand (NYSE:IR). Shares of Gardner Denver were up about 15% at 12:00 p.m. EDT, while shares of Ingersoll-Rand had risen about 6.1%.
Gardner Denver and Ingersoll-Rand are reportedly close to a deal that will create a company with an enterprise value of roughly $15 billion, including debt. A Reverse Morris Trust arrangement would be used, allowing Ingersoll-Rand to combine a division with Gardner Denver in a tax-efficient way.
This news comes soon after Ingersoll-Rand announced the $1.45 billion acquisition of Precision Flow Systems.
Ingersoll-Rand shareholders would receive a mix of cash and stock, and they would own a bit more than half of the new company. Vicente Reynal, the CEO of Gardner Denver, will reportedly lead the new company. Other terms of the proposed deal are still unknown.
A deal is still not a sure thing. KKR & Co, the private-equity company that owns part of Gardner Denver, didn't immediately respond to a request to comment from Reuters, and Ingersoll-Rand declined to comment.
If the two companies do come to an agreement, shareholders should know about it soon.