QUINCY, Ill., July 1 /PRNewswire-FirstCall/ -- Gardner Denver, Inc.
(NYSE: GDI) reported today that it has completed its previously announced
acquisition of Thomas Industries Inc. ("Thomas") (NYSE: TII). Total cash
consideration for the outstanding shares and share equivalents of Thomas
amounted to $734.2 million. The net transaction value, including the
assumption of $8.7 million of long term debt and net of $262.8 million of cash
acquired, was approximately $480.1 million.
Gardner Denver had previously announced the completion of its financings
in connection with the Thomas acquisition. These included the public offering
of 5,658,000 shares of Gardner Denver's common stock at $37.00 per share and a
private placement of $125 million aggregate principal amount of 8% Senior
Subordinated Notes due 2013. Both of these financings were completed in early
May 2005 and are expected to reduce the Company's diluted earnings per share
(DEPS) by approximately $0.09 in the second quarter. Additionally, the
dilutive effect of the May 2005 equity offering on the results of the
Company's businesses that existed prior to the Thomas acquisition is expected
to reduce DEPS by approximately $0.27 to $0.29 in the second half of 2005
based on our previously existing earnings expectations. In addition, the
Company has amended and restated its existing credit agreement with a
syndicate of commercial banks to provide for a new $380 million five-year
senior secured term loan to replace the existing $144 million term loan. The
new term loan will be funded simultaneously with the completion of the Thomas
acquisition. Based on the current three-month LIBOR interest rate, the initial
interest rate on the new term loan will be approximately 5.25%.
Thomas, a worldwide leader in the design, manufacture and marketing of
precision engineered pumps and compressors, reported net sales and operating
income for the three months ended March 31, 2005 of $110.0 million and
$9.0 million, respectively. Operating income for the three-month period of
2005 included depreciation and amortization of $4.6 million and $1.6 million
for legal and professional fees related to this transaction. As a result of
certain non-recurring and non-cash adjustments required under accounting
principles generally accepted in the U.S. (primarily the adjustment of
inventory to fair value) and incremental depreciation and amortization, the
addition of Thomas is expected to reduce Gardner Denver's third quarter 2005
DEPS by $0.06 to $0.08. In the fourth quarter, however, Thomas is expected to
be accretive to DEPS by $0.06 to $0.08. These expectations include
incremental interest expense on the acquisition related debt financing and
reflect a 30% effective tax rate on the combined businesses. The Thomas
acquisition, including the impact of some slight upward pressure on the 2006
combined effective tax rate, is expected to be accretive to net income in
2006.
Cautionary Statement Regarding Forward-Looking Statements
All of the statements in this release, other than historical facts, are
forward-looking statements made in reliance upon the safe harbor of the
Private Securities Litigation Reform Act of 1995, including, without
limitations, the expected effect on earnings from the acquisition. As a
general matter, forward-looking statements are those focused upon anticipated
events or trends and expectations and beliefs relating to matters that are not
historical in nature. Such forward-looking statements are subject to
uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are
beyond the control of the Company. These uncertainties and factors could cause
actual results to differ materially from those matters expressed in or implied
by such forward-looking statements.
The following uncertainties and factors, among others, could affect future
performance and cause actual results to differ materially from those expressed
in or implied by forward-looking statements: (1) the ability to effectively
integrate the Thomas Industries acquisition and realize anticipated cost
savings, synergies and revenue enhancements and (2) the list of other
uncertainties and factors set forth in the Company's quarterly report on Form
10-Q for the period ended March 31, 2005, filed on May 10, 2005. The Company
does not undertake, and hereby disclaims, any duty to update these forward-
looking statements, even though its situation and circumstances may change in
the future.
Gardner Denver, with 2004 revenues of $740 million ($1,306 million on a
pro forma basis including the acquisition of Nash Elmo, which was completed in
September 2004, and Thomas Industries), is a leading worldwide manufacturer of
reciprocating, rotary and vane compressors, liquid ring pumps and blowers for
various industrial and transportation applications, pumps used in the
petroleum and industrial markets, and other fluid transfer equipment serving
chemical, petroleum, and food industries. Gardner Denver's news releases are
available by visiting the Investor Relations page on the Company's website
( http://www.gardnerdenver.com ).
SOURCE Gardner Denver, Inc.
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Related links:
http://www.gardnerdenver.com
Company News On-Call:
http://www.prnewswire.com/comp/303875.html
CONTACT:
Helen W. Cornell, Vice President, Finance and
CFO of Gardner Denver, Inc., +1-217-228-8209
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