Acquisition Complements Compressed Air Segment Product Offering and Widens
Global Presence
QUINCY, Ill., July 28 /PRNewswire-FirstCall/ -- Gardner Denver, Inc.
(NYSE: GDI) announced today that it has signed a definitive agreement to
acquire nash_elmo Holdings, LLC ("nash_elmo"), a leading global manufacturer
of industrial vacuum pumps, for a purchase price of $223.5 million in cash.
For the year ended December 31, 2003, nash_elmo's revenues and earnings before
tax were $212.4 million and $7.8 million, respectively. For the six months
ended June 30, 2004, nash_elmo's revenues and earnings before tax were
$110.3 million and $5.6 million, respectively. For the trailing twelve months
ended June 30, 2004, nash_elmo's revenues and earnings before tax were
$222.2 million and $9.7 million, respectively. Adjusted EBITDA (See Note 1
for definition and reconciliation) for the trailing twelve months ended
June 30, 2004 was $27.0 million. Gardner Denver expects to finance the
acquisition through a revised and expanded senior secured bank facility.
The company's primary manufacturing locations are located in Bad Neustadt
and Nuremberg, Germany; Zibo, China; and Campinas, Brazil. nash_elmo also has
other locations around the world to support sales, customer service,
distribution, and the packaging of vacuum pump systems.
nash_elmo was formed through the 2002 combination of the operations of The
Nash Engineering Company (based in Trumbull, CT) and elmo vacuum technology
GmbH (based in Nuremberg, Germany). As a result of the 2002 combination,
Boston-based Audax Private Equity has held the controlling ownership interest
in nash_elmo. The Nash Engineering Company has retained a minority ownership
interest in nash_elmo as a result of its contribution to the 2002 combination.
Ross Centanni, Chairman, President and Chief Executive Officer of Gardner
Denver said, "We are very pleased at the prospect of adding the nash_elmo
businesses to Gardner Denver. The Nash and elmo names are well-established in
industrial vacuum applications, and the acquisition continues the global
diversification of our revenue base. More than two-thirds of nash_elmo sales
are to customers outside the United States. The liquid ring vacuum pump and
side channel blower product lines, nash_elmo's strengths, are complementary to
the existing product portfolio of our Compressed Air Products segment.
nash_elmo has a proven track record of successful international operations,
with significant manufacturing operations on three continents. Consistent
with our stated strategic goals, this acquisition would further expand the
international scope of our business, permitting us to capitalize on greater
opportunities to better serve customers on a global basis."
The acquisition is expected to close during the third quarter of 2004.
Closing is subject to customary closing conditions including the receipt of
applicable regulatory approvals. There are certain non-recurring, non-cash
adjustments required under accounting principles generally accepted in the
U.S. (primarily the adjustment of inventory to fair value) that are expected
to result in a mildly dilutive impact on Gardner Denver's net income in 2004,
assuming a third quarter closing. This acquisition is expected to be
accretive to earnings for years after 2004.
Note 1
EBITDA consists of net income before provision for income taxes, interest
expense and depreciation and amortization. EBITDA is not a measurement of
financial performance or liquidity determined in accordance with accounting
principles generally accepted in the United States and should not be
considered as an alternative to net income, net cash provided by operating
activities or other consolidated income or cash flow statement data prepared
in accordance with generally accepted accounting principles. We present EBITDA
because we believe it is frequently used by analysts, investors and other
interested parties in the financial evaluation of companies in our industry,
and we believe it provides useful information to investors. Our definition of
EBITDA, however, may differ from the definition used by other companies. The
adjusted EBITDA presented here also reflects the removal of items that are
expected to be non-recurring. A reconciliation of nash_elmo's net income to
adjusted EBITDA for the trailing twelve months ended June 30, 2004 is as
follows (amounts in millions):
Net income $ 7.2
Provision for income taxes 2.5
Interest expense 4.6
Depreciation and amortization 9.1
EBITDA 23.4
Non-recurring restructuring charges 3.3
Other non-recurring items (including
management fees), net 0.3
Adjusted EBITDA $ 27.0
Gardner Denver, with 2003 revenues of $440 million ($578 million on a pro
forma basis including Syltone), is a leading manufacturer of reciprocating,
rotary and vane compressors 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 ).
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 complete the nash_elmo acquisition and
identify, negotiate and complete possible future acquisitions; (2) the speed
with which the Company is able to integrate acquisitions and realize the
related financial benefits; (3) the ability to maintain and to enter into key
purchasing, supply and outsourcing relationships; (4) the ability to
effectively manage the transition of iron casting supply to alternate sources
and the skill, commitment and availability of such alternate sources; (5) the
successful implementation of other strategic initiatives, including, without
limitation, restructuring plans, inventory reduction programs and other cost
reduction efforts; (6) the domestic and/or worldwide level of oil and natural
gas prices and oil and gas drilling and production, which affect demand for
the Company's petroleum products; (7) changes in domestic and/or worldwide
industrial production and industrial capacity utilization rates, which affect
demand for the Company's compressed air products; (8) pricing of the Company's
products; (9) the degree to which the Company is able to penetrate niche and
international markets; (10) changes in currency exchange rates (primarily
between the U.S. dollar, the euro and the British pound); (11) changes in
interest rates; (12) the ability to attract and retain quality management
personnel; (13) market performance of pension plan assets and changes in
discount rates used for actuarial assumptions in pension and other
postretirement obligation and expense calculations; (14) the continued ability
to effectively manage and defend litigation matters pending, or asserted in
the future, against the Company; (15) the development and acceptance of the
Company's new product offerings; and (16) the continued successful
implementation and utilization of the Company's electronic services. 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.
SOURCE Gardner Denver, Inc.
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