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KKR readies $2.725B loan package backing Gardner Denver LBO

A UBS-led arranger group has set bank meetings in New York and London to launch the $2.725 billion loan package backing Kohlberg Kravis Roberts & Co.’s planned $3.9 billion leveraged buyout of Gardner Denver.

The New York meeting is set for 10:30 a.m. EDT on Tuesday July 9, with London presentation set to start at noon on July 11.

The senior secured component of the financing consists of a $1.8 billion term loan, a $525 million equivalent euro-denominated term loan, both seven years, and a $400 million, five-year revolving credit. The financing commitment also provides for an up to $675 million unsecured bridge loan, which is expected to be replaced with high-yield bonds.

KKR is kicking in up to $1.16 billion of equity, according to an SEC filing.

UBS will be left lead on the senior secured loans, while Deutsche Bank will be left lead on the bonds. The bookrunner group includes UBS, Barclays, Citi, DB, Mizuho, RBC, Macquarie, and HSBC, while KKR Capital Markets and Sumitomo Mitsui Banking are lead arrangers.

KKR agreed to purchase the industrial equipment company for $76 per share, which represents an approximately 39% premium to the company’s closing share price on Oct. 24, 2012, the day before the company confirmed it was exploring strategic alternatives.

Wayne, Pa.-based Gardner Denver makes highly engineered products, including compressors, liquid ring pumps, and blowers. The company reported 2012 revenue of about $2.4 billion. – Chris Donnelly/Kerry Kantin