Gardner Denver Holdings Inc. is nearing a deal to merge with a division of Ingersoll-Rand PLC, according to people familiar with the matter, in a combination that would create the world’s second-largest manufacturer of industrial pumps and compressors with a market capitalization of around $11.6 billion.
Though the exact terms couldn’t be determined, the deal, which could be announced as soon as this week, would involve a mixture of cash and stock for Ingersoll IR, +1.13% shareholders, the people said. It would combine Gardner Denver’s broad range of compressor, pump, vacuum and blower products and services with the part of Ingersoll-Rand that makes similar tools and systems as well as equipment for lifting and material handling, and golf carts.
Gardner Denver GDI, +0.97% , part-owned by private-equity firm KKR & Co., has a current market value of around $5.8 billion. The new business would have an enterprise value, including debt, of about $15 billion, the people said.
The deal would be structured as a so-called Reverse Morris Trust, a tax efficient way for companies to sell off a division. Ingersoll shareholders are expected to own just over half of the new company.
An expanded version of this report appears on WSJ.com.
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