The deal would build a business that would become the second-largest manufacturer of industrial compressors and pumps in the world
Gardner Denver Holdings Inc, a global provider of industrial equipment is reportedly nearing an agreement to merge with a business unit of Ingersoll-Rand PLC, an Irish–American globally diversified industrial manufacturing company.
Supposedly, the deal would build a business that would become the second-largest manufacturer of industrial compressors and pumps in the world, having a $11.6 billion market cap. Sources familiar with the matter informed that the deal, which could be announced probably by this week, would involve a combination of stock and cash for Ingersoll shareholders.
It would bring together a wide range of Gardner Denver products and services which include pump, blower, compressor, and vacuum and the division of Ingersoll-Rand that manufactures similar tools and systems and also equipment for material handling and lifting, as well as golf carts, sources said.
Apparently, Gardner Denver is partly owned by private-equity firm KKR & Co and has a market value of about $5.8 billion currently. The new business would boast of an enterprise value of around $15 billion, including debt.
The deal would be organized as a Reverse Morris Trust, which is a tax effective way for companies to sell out a division. Besides, Ingersoll shareholders are anticipated to a little more than half of the new company, sources informed.
Recently, shares of Gardner Denver Holdings Inc had displayed positive signals as the stock had ended 3.58% higher for the week. The company’s recent performance has shown that the shares have shifted 3.70% over the past 4-weeks, 12.56% more than the past half year, and -11.46% over the entire past year, reports said.
Sources mentioned that the climate segment of Ingersoll-Rand, which consists of the firm’s heating, ventilation and air, as well as temperature-controlled transport businesses, will not fall under this agreement with Gardner Denver. In 2018, the segment had accounted for 78% of the company’s overall revenues.