Thomas, headquartered in Louisville, Kentucky, designs, manufactures and markets Rietschle Thomas brand pumps and compressors for use in global OEM applications, Welch laboratory equipment and Oberdorfer bronze and high alloy liquid pumps. Thomas' products are sold into a broad range of attractive end markets, including medical/laboratory, general industrial, printing, environmental and packaging. Thomas has wholly-owned operations in 21 countries, on five continents. Its primary manufacturing facilities are located in Sheboygan, WI, Monroe, LA, Skokie, IL and Syracuse, NY and Schopfheim, Fahrnau, Puchheim and Memmingen, Germany. In 2004, Thomas completed the construction of a manufacturing facility in Wuxi, China that is expected to become operational in mid 2005. Thomas has other locations around the world to support sales, marketing, service and distribution. The company serves a diversified, global customer base of OEMs, end users and engineered system customers with a relationship strategy focused on product innovation, application engineering and value added designs.
According to their fourth quarter earnings release, for the year ended December 31, 2004, Thomas' revenues and operating income were $410.1 million and $208.8 million, respectively. Operating income for this period included $18.6 million from Thomas' 32% interest in the Genlyte Thomas Group LLC (GTG), a joint venture formed with The Genlyte Group Incorporated (Genlyte) in 1998, and a $160.4 million nonrecurring gain on the sale of this joint venture in July 2004. For the twelve-month period of 2004, operating income from Thomas' Pumps and Compressors segment, net of corporate expenses, was $29.7 million. For the year ended December 31, 2004, Thomas' EBITDA (the sum of income before income taxes, interest expense, depreciation and amortization), excluding equity income and the gain on the sale of its interest in GTG and $5.3 million of non-recurring items, was $51.3 million.
Ross Centanni, Chairman, President and Chief Executive Officer of Gardner Denver, said, "We expect the Thomas product portfolio to complement and enhance the Gardner Denver offering in terms of channels of distribution, applications and regions of the world served. This acquisition allows us to continue pursuing our strategic goals through leveraging our international opportunities and better serving our customers on a worldwide basis. The Thomas and Rietschle names are well-established in industrial vacuum applications. The acquisition also opens new sales channels through Thomas' strong OEM focus and new growth markets through their leading position in the medical market segment. In 2004, approximately 23% of Thomas' revenues came from this higher-growth market segment. Additionally, the acquisition continues the global diversification of our revenue base. More than 60% of Thomas' sales are to customers outside the United States."
Gardner Denver has received a debt commitment from Bear, Stearns & Co. Inc. and JPMorgan Chase Bank, N.A. to fully finance the acquisition of Thomas. However, Gardner Denver intends to finance the acquisition through an amended and expanded senior secured bank facility and a public offering of approximately $200 million of its common stock. In addition, the Company may choose to access the debt capital markets. The acquisition is not conditioned upon completion of any of these financings and the size and timing of both the equity and any debt financings are subject to prevailing market conditions.
The acquisition is expected to close in 2005. Closing is subject to the approval of Thomas' stockholders and other customary closing conditions, including the receipt of applicable regulatory approvals. The acquisition of Thomas is expected to increase Gardner Denver's net income in 2005. However, as a result of certain non-recurring, non-cash adjustments required under accounting principles generally accepted in the U.S. (primarily the adjustment of inventory to fair value) and the anticipated equity financing, the acquisition is expected to reduce Gardner Denver's diluted earnings per share slightly in 2005. The Company expects that the acquisition will be accretive to diluted earnings per share within twelve months of closing, after taking into account the proposed equity and debt financing outlined above and the anticipated realization of acquisition-related integration synergies.
Most Popular Articles
From the Career Center
Jobs that may interest you