Gardner Denver cuts U.S. term loan spread to Libor plus 350 bps

By Sara Rosenberg

New York, July 18 - Gardner Denver Inc. reduced pricing on its $1.8 billion seven-year U.S. term loan to Libor plus 350 basis points from talk of Libor plus 400 bps to 425 bps, according to a market source.

Also, the 101 soft call protection was shortened to six months from one year.

As before, the U.S. loan has a 1% Libor floor, an original issue discount of 99 and amortization of 1% per annum.

Recommitments on the U.S. loan are due at noon ET on Friday, the source said.

Also included in the company's $2,725,000,000 senior secured credit facility (B1/B) is a $525 million seven-year euro term loan and a $400 million five-year revolver.

UBS Securities LLC, Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Corporate Bank Ltd., RBC Capital Markets, Macquarie Capital and HSBC Securities (USA) Inc. are the bookrunners on the deal and the joint lead arrangers with KKR Capital Markets and Sumitomo Mitsui Banking.

Proceeds from the credit facility will be used to help fund the buyout of the company by Kohlberg Kravis Roberts & Co. LP.

Other funds for the transaction are expected to come from $675 million of senior unsecured notes, which are backed by a commitment for a $675 million senior unsecured bridge loan.

Under the agreement, KKR will acquire all of the outstanding shares of Gardner Denver common stock for $76 per share in cash. The transaction is valued at about $3.9 billion, including the assumption of debt.

Closing is expected in the third quarter, subject to shareholder approval, regulatory approvals and other customary conditions.

Gardner Denver is a Wayne, Pa.-based manufacturer of industrial compressors, blowers, pumps, loading arms and fuel systems.

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