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KKR-owned Gardner Denver makes tepid return to stock market: Reuters

(Reuters) — Shares of Gardner Denver Holdings Inc (GDI.N) rose as much as 6.5 percent in their stock market debut on Friday, giving the U.S. industrial machinery maker a market value of about $4 billion.

The company’s initial public offering of 41.3 million shares was priced at $20 per share, below its expectation of $23-$26, and raised about $826 million.

Shares opened at $21.25 on the New York Stock Exchange and hit a high of $21.30 in morning trading. The stock was last up about 3 percent.

U.S. IPO activity has been on the rise in 2017, with 25 companies going public in the first quarter, compared to last year’s eight, according to Renaissance Capital, a manager of IPO-focused exchange traded funds.

Companies across business sectors have entered the stock market thanks to a pick up in oil prices, an improving economy and hopes of corporate tax cuts.

Milwaukee-based Gardner Denver makes industrial blowers, drilling pumps, air compressors and other machines used in the industrial, energy and medical sectors.

Founder in 1859, the company listed itself on the New York Stock Exchange at the height of World War II. It was taken private by buyout firm KKR in 2013 for $3.9 billion.

For KKR, Gardner Denver’s listing represents yet another industrial deal following the sales of fall protection and rescue equipment maker Capital Safety and drug capsule manufacturer Capsugel. KKR scored a profit of about $4.25 billion on these two deals.

Gardner Denver’s IPO comes amid a recovery in oil prices following a more than two-year slump that dampened demand from energy customers who had slashed spending on machinery and other equipment.

Increased oil and gas drilling since last year will help drive demand for Gardner Denver’s displacement pumps, fluid ends and drilling-related services, the company said in its IPO paperwork.

Gardner Denver’s revenue had slumped in the last two years, dipping nearly 9 percent to $1.94 billion last year and plunging 17 percent in 2015, largely reflecting spending cuts by customers. Nearly a third of last year’s revenue came from the energy sector.

The company recorded a loss of $36.6 million in 2016, compared with $351.2 million a year before, when it took a more than $300 million impairment charge.

Gardner Denver will use some of the IPO proceeds to pay down its debt, which stood at $2.78 billion as of March 31.
Goldman Sachs, Citigroup, UBS and KKR were among the underwriters to the IPO.