KKR Co. Settles Lawsuit Over Takeover

Jul 1 2014 | 8:24am ET

A Kohlberg Kravis Roberts portfolio company has agreed to pay $29 million to settle allegations that it accepted an unreasonably low bid from the private-equity company last year.

Industrial pumps-maker Gardner Denver struck the deal with its former shareholders after two days of talks. The company’s former owners had sued the company and KKR, alleging that the latter used confidential information it received from former Gardner Denver CEO Barry Pennypacker, whom it hired as a consultant in 2012, in violation of Pennypacker’s severance deal.

The former shareholders noted that KKR’s code name for the Gardner Denver deal was “Project Bootcamp,” apparently a play on the name of fitness company “Barry’s Bootcamp.” In addition, KKR allegedly offered Pennypacker a $1 million bonus if its bid proved successful.

KKR, which paid $3.7 billion for Gardner Denver after a rival deal fell through, denied that Pennypacker divulged confidential information. The firm added that his advice did not cause it to offer less for Gardner Denver.

The settlement amounts to less than a 1% increase in the $76 per share KKR paid. Up to one-third of the total settlement is expected to go to the former shareholders’ lawyers. The deal, disclosed in a court filing Friday, still requires a judge’s approval.


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