IPO Stocks to Sell Now: Gardner Denver Holdings (GDI)
I’m going to sound like a broken record here but given Gardner Denver Holdings Inc (NYSE:GDI) is sponsored by KKR, I’d stay away from this one as well. Out of the gate at a reasonable clip — a 5.5% first-day return and up 8.7% since May 12 — Gardner Denver, an industrial firm specializing in compressed air technologies, was taken private by KKR in July 2013. KKR paid $3.9 billion including debt.
In 2012, the year before KKRs takeover, Gardner Denver had $373.8 million in operating income from $2.4 billion in revenue. At the end of December 2012, it had $366.9 million in long-term debt. As of December 31, 2016, Gardner Denver had operating income of $104.3 million, $1.9 billion in revenue, and $2.8 billion in long-term debt.
These are not numbers indicative of an improving business. Sure, the energy market’s been walloped and represents 32% of its overall business, but adding almost eight times the debt was far more burdensome to the health of Gardner Denver’s business. KKR has turned this company into a dog. Stay away.