INGERSOLL RAND INC. Item 8.01 Other Events
This Current Report on Form 8-K is being filed to disclose certain additional
information and update certain information with respect to the proxy
statement/prospectus filed by
The following information supplements the Proxy Statement/Prospectus-Information Statement and should be read in conjunction with the Proxy Statement/Prospectus-Information Statement, which should be read in its entirety. To the extent that information herein differs from or updates information contained in the Proxy Statement/Prospectus-Information Statement, the information contained herein supersedes the information contained in the Proxy Statement/Prospectus-Information Statement. The information contained in this supplement is incorporated by reference into the Proxy Statement/Prospectus-Information Statement. All page references in the information below are to pages in the Proxy Statement/Prospectus-Information Statement, and terms used below have the meanings set forth in the Proxy Statement/Prospectus-Information Statement, unless otherwise defined below.
Supplemental Disclosures in Connection with Transaction Litigation
Following the filing of Gardner Denver's Proxy Statement/Prospectus-Information
Statement, a purported class action lawsuit was filed on
Gardner Denver believes that the allegations in the Actions are without merit and that no further disclosure is required to supplement the Proxy Statement/Prospectus-Information Statement under applicable law; however, to eliminate the burden, expense and uncertainties inherent in such litigation, and without admitting liability or wrongdoing, Gardner Denver is providing certain supplemental disclosures to the Proxy Statement/Prospectus-Information Statement as set forth below. Nothing in these supplemental disclosures shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein. The defendants have vigorously denied, and continue vigorously to deny, that they have committed any violation of law or engaged in any of the wrongful acts that were alleged in the Actions. Plaintiffs have agreed to voluntarily dismiss the Actions.
Supplemental Disclosures in Connection with the Amended and Restated 2017 Equity Plan
In order to ensure that such plan is fully aligned with the requirements under
the ISS stock plan guidelines for the payment of dividends and dividend
equivalent rights on stock awards, on
Supplemental Disclosures with respect to the Proxy Statement/Prospectus-Information Statement
Gardner Denver wishes to voluntarily update the illustrative calculation of the merger consideration set forth on page 57-58 of the Proxy Statement/Prospectus-Information Statement as set forth below.
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SUPPLEMENT TO PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT
Supplemental Disclosures in Connection with Transaction Litigation
Certain Financial Projections
The following paragraph on page 74 is hereby amended by adding the following bolded and underlined text:
Gardner Denver Adjustments to Ingersoll Rand Financial Projections
For purposes of Baird's financial analysis of the exchange ratio provided for in
the merger pursuant to the Merger Agreement, which was reviewed with Gardner
Denver's board of directors, Gardner Denver management calculated (i) Unlevered
Free Cash Flows of the Ingersoll Rand Industrial Business projected for the
years ended
Opinion of Baird
The second full sentence of the second full paragraph on page 77 is hereby amended by adding the following bolded and underlined text:
Baird calculated the implied enterprise value of Gardner Denver to be
The third full sentence of the third full paragraph on page 77 is hereby amended by adding the following bolded and underlined text:
The group of selected publicly traded companies reviewed and corresponding EV to Adjusted EBITDA and EV to Adjusted EBIT multiples for each of 2018 and projected 2019 is listed below.
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The following table is inserted on page 77, immediately after the third full sentence (as amended) of the third full paragraph on page 77:
Valuation Mutiples
EV/Adjusted EBITDA EV/Adjusted EBIT
Company Name CY 2018 CY 2019P CY 2018 CY 2019P
Atlas Copco AB 13.5 x 14.4 x 15.6 x 16.9 x
Flowserve Corporation 16.3 13.5 21.5 16.9
Graco Inc. 19.1 18.2 21.2 20.3
IDEX Corporation 18.9 18.1 21.5 20.4
Nordson Corporation 16.9 15.0 20.9 17.8
Polaris Industries Inc. 11.3 9.9 16.1 14.8
Snap-on Incorporated 10.2 10.0 11.2 10.9
Stanley Black & Decker, Inc. 12.5 11.6 16.2 13.8
Cumulative Mean 14.3 x 13.4 x 17.3 x 15.9 x
Cumulative Median 14.9 x 13.9 x 18.5 x 16.9 x
The first sentence of the second full paragraph on page 80 is hereby amended by adding the following bolded and underlined text:
Ingersoll Rand Industrial Business Discounted Cash Flow Analysis
In order to assess the relative public market valuation of the Ingersoll Rand
Industrial Business, Baird performed a discounted cash flow analysis utilizing
the
The second full paragraph on page 80 is hereby amended by inserting the following sentence in bolded and underlined as the new third sentence of such paragraph:
In this analysis, Baird calculated the present values of the unlevered free cash flows from 2019 to 2023 by discounting these amounts at rates ranging from 10.5% to 12.5%. Baird calculated the estimated weighted cost of capital for the Ingersoll Rand Industrial Business by using the Capital Asset Pricing Model and the beta based on the selected publicly traded companies used in the Ingersoll Rand Industrial Business selected publicly traded company analysis.
The current third sentence of the second full paragraph on page 80 is hereby amended by adding the following bolded and underlined text:
Baird calculated the present values of the free cash flows beyond 2023 by
assuming terminal values ranging from 10.0x to 12.0x year 2023 EBITDA of
approximately
The current fourth sentence of the second full paragraph on page 80 is hereby amended by adding the following bolded and underlined text:
The summation of the present values of the unlevered free cash flows, excluding
the Expected Synergies (as set forth below in the Implied Merger Exchange Ratio
Analyses), and the present values of the terminal values implied enterprise
values ranging from
The first sentence of the last full paragraph on page 81 is hereby amended by deleting the following strikethrough text and adding the following bolded and underlined text:
Gardner Denver Discounted Cash Flow Analysis. Baird performed a discounted cash flow analysis utilizing Gardner Denver's projected unlevered free cash flows (defined as net income excluding after-tax net interest, plus depreciation and amortization, less capital expenditures and increases in net working capital) from 2019 to 2023, as provided by Gardner Denver's senior management in the Forecasts Gardner Denver Financial Projections.
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The last full paragraph on page 81 is hereby amended by adding the following sentence in bolded and underlined text:
In this analysis, Baird calculated the present values of the unlevered free cash flows from 2019 to 2023 by discounting these amounts at rates ranging from 10.5% to 12.5%. Baird calculated the estimated weighted cost of capital for Gardner Denver by using the Capital Asset Pricing Model and the beta based on the selected publicly traded companies used in the Gardner Denver selected publicly traded company analysis.
The current third sentence of the last full paragraph on page 81 in hereby amended by adding the following bolded and underlined text:
Baird calculated the present values of the free cash flows beyond 2023 by
assuming terminal values ranging from 10.0x to 12.0x year 2023 EBITDA of
approximately
The first sentence of the first full paragraph on page 84 is hereby amended by deleting the following strikethrough text and adding the following bolded and underlined text:
Additional Information about Baird and Its Engagement
Pursuant to its engagement, Baird will receive a transaction fee of
approximately
The first and second sentences of the second full paragraph on page 84 are hereby amended by adding the following bolded and underlined text:
Baird has, in the past, provided investment banking services to Gardner Denver
for which Baird received customary compensation. In
Item 9.01 Financial Statements and Exhibits
(d) Exhibit No. Description 99.1Ingersoll Rand Inc. 2017 Omnibus Incentive Plan 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 6
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FORWARD-LOOKING STATEMENTS
This communication contains "forward-looking statements" as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transaction between Ingersoll Rand and Gardner Denver. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "target," "endeavor," "seek," "predict," "intend," "strategy," "plan," "may," "could," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements, other than historical facts, including, but not limited to, statements regarding the expected timing and structure of the proposed transaction, the ability of the parties to complete the proposed transaction, the expected benefits of the proposed transaction, including future financial and operating results and strategic benefits, the tax consequences of the proposed transaction, and the combined company's plans, objectives, expectations and intentions, legal, economic and regulatory conditions, and any assumptions underlying any of the foregoing, are forward looking statements.
These forward-looking statements are based on Gardner Denver's and Ingersoll
Rand's current expectations and are subject to risks and uncertainties, which
may cause actual results to differ materially from Gardner Denver's and
Ingersoll Rand's current expectations. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or anticipated by such
forward-looking statements. The inclusion of such statements should not be
regarded as a representation that such plans, estimates or expectations will be
achieved. Important factors that could cause actual results to differ materially
from such plans, estimates or expectations include, among others, (1) that one
or more closing conditions to the transaction may not be satisfied or waived, on
a timely basis or otherwise, including that the required approval by the
stockholders of Gardner Denver may not be obtained; (2) the risk that the
proposed transaction may not be completed on the terms or in the time frame
expected by Ingersoll Rand or Gardner Denver, or at all, (3) unexpected costs,
charges or expenses resulting from the proposed transaction, (4) uncertainty of
the expected financial performance of the combined company following completion
of the proposed transaction; (5) failure to realize the anticipated benefits of
the proposed transaction, including as a result of delay in completing the
proposed transaction or integrating the businesses of Gardner Denver and
Any forward-looking statements speak only as of the date of this communication. Neither Ingersoll Rand nor Gardner Denver undertakes any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
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IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction, Gardner Denver and
PARTICIPANTS IN THE SOLICITATION
Ingersoll Rand, Gardner Denver and certain of their respective directors and
executive officers may be deemed to be participants in the solicitation of
proxies from shareholders of Gardner Denver in connection with the proposed
transaction under the rules of the
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