On Friday, private equity powerhouse Kohlbeg Kravis Roberts (KKR) announced it has agreed to buy out engineered products manufacturer Gardner Denver (NYSE:GDI) in a deal valued at $3.9 billion, including a small amount of assumed debt.
KKR will pay $76 per share for Gardner Denver's outstanding shares, a price KKR describes as a 39% premium to what these shares cost on October 24, 2012, when the company first announced that it was up for sale. The premium is significantly less -- just 3% -- when compared to what Gardner Denver shares were fetching yesterday, one day before KKR confirmed its buyout offer.
Nonetheless, Gardner Denver says its Board of Directors has voted to accept KKR's offer, and avers that "a thorough review of strategic alternatives" shows this is probably the best offer it's going to get. KKR's offer values the shares at approximately 1.6 times sales, a bit over 2.5 times book value, and 14.4 times earnings.
The shares reacted with mild enthusiasm to KKR's offer, rising 1.2% in Friday trading, to $74.71.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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