424B4 1 s001556x13_424b4.htm 424B4

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Filed Pursuant to Rule 424(b)(4)
Registration No. 333-216320

PROSPECTUS

41,300,000 Shares


Gardner Denver Holdings, Inc.
Common Stock

This is an initial public offering of shares of common stock of Gardner Denver Holdings, Inc. We are offering 41,300,000 shares of our common stock.

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is $20.00 per share. Our common stock has been approved for listing on the New York Stock Exchange (the “NYSE”) under the symbol “GDI”.

After the completion of this offering, affiliates of Kohlberg Kravis Roberts & Co. L.P. will continue to control a majority of the voting power of our common stock. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the applicable stock exchange. See “Principal Stockholders.”

Investing in our common stock involves risk. See “Risk Factors” beginning on page 17 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission (the “SEC”), nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 
Per Share
  Total  
Initial public offering price
$
20.00
 
$
826,000,000
 
Underwriting discounts and commissions
$
1.10
 
$
45,430,000
 
Proceeds, before expenses, to us(1)
$
18.90
 
$
780,570,000
 

(1)See “Underwriting (Conflicts of Interest)” for additional information regarding underwriting compensation.

To the extent that the underwriters sell more than 41,300,000 shares of our common stock, the underwriters have the option to purchase up to an additional 6,195,000 shares from us at the initial public offering price, less the underwriting discounts and commissions, within 30 days of the date of this prospectus.

The underwriters expect to deliver the shares against payment in New York, New York on or about May 17, 2017.

Joint Book-Running Managers

Goldman Sachs & Co. LLC
Citigroup
UBS Investment Bank
KKR
Simmons & Company International
Deutsche Bank Securities
Baird
Credit Suisse
Morgan Stanley
            Energy Specialists of Piper Jaffray

Co-Managers

William Blair
Stifel
HSBC
Macquarie Capital
Credit Agricole CIB
Mizuho Securities

Prospectus dated May 11, 2017.

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You should rely only on the information contained in this prospectus or in any free writing prospectus that we authorize to be delivered to you. We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. We are offering to sell, and seeking offers to buy, these securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the securities. Our business, financial condition, results of operations and prospects may have changed since that date.

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MARKET, RANKING AND OTHER INDUSTRY DATA

In addition to the industry, market and competitive position data referenced throughout this prospectus that are prepared from our own internal estimates relying on our management’s knowledge and experience in the markets in which we operate and our research, some market data and other statistical information used throughout this prospectus are based in part upon information provided by independent research and advisory firms, none of which have been commissioned by us, but for certain of which we have paid a subscription fee. Third-party industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our management’s knowledge and experience, in turn, are based on information obtained from our customers, distributors, suppliers, trade and business organizations and other contacts in the markets we operate. We are responsible for all of the disclosure in this prospectus and while we believe that each of the publications, studies and surveys used throughout this prospectus are prepared by reputable sources, neither we nor the underwriters have independently verified market and industry data from third-party sources. While we believe our internal company research and estimates are reliable, such research and estimates have not been verified by any independent source. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This prospectus contains some of our trademarks, trade names and service marks, including, among others, CompAir, Elmo Rietschle, Emco Wheaton, Gardner Denver, Nash, Robuschi and Thomas. Each one of these trademarks, trade names or service marks is either (i) our registered trademark, (ii) a trademark for which we have a pending application or (iii) a trade name or service mark for which we claim common law rights. All other trademarks, trade names or service marks of any other company appearing in this prospectus belong to their respective owners. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are presented without the TM, SM and ® symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

BASIS OF PRESENTATION

Unless otherwise indicated or the context otherwise requires, the financial statements and other data in this prospectus reflect the consolidated business and operations of Gardner Denver Holdings, Inc. and its consolidated subsidiaries, including Gardner Denver, Inc., its principal operating subsidiary. Unless the context otherwise requires, all references herein to “Gardner Denver,” the “Company,” “we,” “our” or “us” refer to Gardner Denver Holdings, Inc. and its consolidated subsidiaries. References in this prospectus to the “Sponsor” or “KKR & Co.” are to Kohlberg Kravis Roberts & Co. L.P. and certain of its affiliates.

All references to years in this prospectus, unless otherwise noted, refer to our fiscal years, which end on December 31.

Amounts in this prospectus are presented in U.S. dollars rounded to the nearest million, unless otherwise noted. Amounts in our consolidated financial statements included in this prospectus are presented in U.S. dollars rounded to the nearest thousand, unless otherwise noted. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. The accounting policies set out in the audited consolidated financial statements contained elsewhere in this prospectus have been consistently applied to all periods presented.

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PROSPECTUS SUMMARY

This summary highlights certain significant aspects of our business and this offering. This is a summary of information contained elsewhere in this prospectus, is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read the entire prospectus, including the information presented under the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” and the consolidated financial statements and the notes thereto, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties.

Our Company

We are a leading global provider of mission-critical flow control and compression equipment and associated aftermarket parts, consumables and services, which we sell across multiple attractive end-markets within the industrial, energy and medical industries. We manufacture one of the broadest and most complete ranges of compressor, pump, vacuum and blower products in our markets, which, combined with our global geographic footprint and application expertise, allows us to provide differentiated product and service offerings to our customers. Our products are sold under a collection of premier, market-leading brands, including Gardner Denver, CompAir, Nash, Emco Wheaton, Robuschi, Elmo Rietschle and Thomas, which we believe are globally recognized in their respective end-markets and known for product quality, reliability, efficiency and superior customer service. These attributes, along with over 155 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, which we believe have resulted in leading market positions within each of our operating segments. We have sales in more than 175 countries and our diverse customer base utilizes our products across a wide array of end-markets that have favorable near- and long-term growth prospects, including industrial manufacturing, energy (with particular exposure to the North American upstream land-based market), transportation, medical and laboratory sciences, food and beverage packaging and chemical processing. For the year ended December 31, 2016, we generated revenue of $1,939.4 million, a net loss of $31.3 million and Adjusted EBITDA of $400.7 million. For a reconciliation of Adjusted EBITDA to net loss, see Note (2) under “—Summary Historical Consolidated Financial and Other Data.”

Our products and services are critical to the processes and systems in which they are utilized, which are often complex and function in harsh conditions where the cost of failure or downtime is high. However, our products and services typically represent only a small portion of the costs of the overall system. As a result, our customers place a high value on our application expertise, product reliability and the responsiveness of our service. We support our customers globally with 37 key manufacturing facilities, more than 30 complementary service and repair centers across six continents and approximately 6,100 employees worldwide as of March 31, 2017.

The process-critical nature of our product applications, coupled with the standard wear and tear replacement cycles associated with the usage of our products, generates opportunities to support customers with our broad portfolio of aftermarket parts, consumables and services. Customers place a high value on minimizing any time their operations are offline. As a result, the availability of replacement parts and our repair and support services are key components of our value proposition, and our large installed base of products provides a recurring revenue stream through our aftermarket parts, consumables and services offerings. Our aftermarket revenue is significant, representing 35% of total revenue and approximately 40% of our combined Industrials and Energy segments’ revenue.

We were acquired by an affiliate of our Sponsor on July 30, 2013 (the “KKR Transaction”) and have undergone a significant transformation since that date. From 2014 to 2016, our transformation significantly improved our underlying operating performance, enabling us to achieve Segment Adjusted EBITDA Margins in excess of 20% across all segments in 2016, notwithstanding the decline in our revenues from $2,570 million to $1,939 million, which was driven by the significant downturn in the upstream energy market and currency volatility during that period. Our senior leadership team, led by our CEO Vicente Reynal, has been reconstituted and expanded, which we believe brought together deep expertise from leading global industrial organizations. In addition, 45% of our top 100 business managers, including the senior management team, have joined since the KKR Transaction, which we believe added significant new levels of talent to our leadership team. As part of our transformation, we also reorganized our Company into three business segments because of the unique sales

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drivers and market characteristics of each. Together, our Industrials, Energy and Medical segments create a diverse portfolio with exposure to highly attractive end-markets, significant aftermarket revenues, upside from an upstream energy recovery and positive secular trends across all segments.

 
Industrials Segment
Energy Segment
Medical Segment
2016 Segment Revenue
$1,082 million
$628 million
$229 million
2016 Segment Adjusted EBITDA
$218 million
$144 million
$62 million
2016 Segment Adjusted EBITDA Margin
20.1%
22.9%
27.1%
Industrials (56% of 2016 total revenue): We design, manufacture, market and service one of the broadest portfolios of air compression, vacuum and blower products, including associated aftermarket parts, consumables and services, across a wide array of technologies and applications for use in diverse end-markets. We believe our ability to support custom industrial application needs from nearly full vacuum to approximately 7,000 pounds per square inch (psi) pressure levels makes us a partner of choice for many of our long-standing customers. Our large installed base also provides for a significant stream of recurring aftermarket revenue, which often cumulatively exceeds the original cost of the product.
Energy (32% of 2016 total revenue): We design, manufacture, market and service a diverse range of positive displacement pumps, including drilling pumps and hydraulic fracturing pumps (“frac pumps”), liquid ring vacuum pumps, compressors and integrated systems, engineered fluid loading and transfer equipment and associated aftermarket parts, consumables and services. The highly engineered products offered by our Energy segment serve customers across upstream, midstream and downstream energy markets, as well as petrochemical processing, transportation and general industrial sectors. Many of the products in our Energy segment are highly aftermarket-intensive in nature, with some applications, such as certain products we sell into upstream energy, for which the cumulative aftermarket revenue stream can be multiples of the cost of the original pump.
Medical (12% of 2016 total revenue): We design, manufacture and market a broad range of highly specialized gas, liquid and precision syringe pumps that are specified by medical equipment suppliers and integrated into their final equipment for use in applications such as oxygen therapy, blood dialysis, patient monitoring, laboratory sterilization and wound treatment, among others. We offer a comprehensive product portfolio across a breadth of technologies to address the medical and laboratory sciences pump and fluid handling industry, as well as a range of end-use vacuum products for laboratory science applications, and we recently expanded into liquid pumps and automated liquid handling components and systems.

Our business is diversified across geographic regions, end-markets and type of product specification:


(1)Our geographic regions are grouped into North and South America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”).
(2)The classification of end-markets for sales made through independent distributors (rather than through direct sales to end-users) is based on an assessment of the distribution channels through which such sales are made.

Our top priority since the completion of the KKR Transaction has been the transformation of our business, which we have driven by investing in our corporate and business leadership team, expanding our commercial

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reach, improving our operational capabilities and creating a performance-oriented organization. As a result, we significantly improved our underlying operating performance and, we believe, have laid the foundation for ongoing value creation. Some examples of the improvement achieved from 2014 to 2016 include:

growing our Energy and Medical Segment Revenue by mid-single digit growth rates, excluding in each case the impact of the significant downturn in the upstream energy market and currency volatility;
growing Segment Adjusted EBITDA and meaningfully expanding Segment Adjusted EBITDA Margins each year across all of our segments, excluding the impact of the significant downturn in the upstream energy market and currency volatility;
successfully reducing corporate costs not allocated to our segments from $47.3 million in 2014 to $22.7 million in 2016, representing a 52% reduction in corporate overhead costs;
strengthening our customer service and connectivity by transitioning our sales team and realigning our product engineering and marketing teams in our Industrials segment into an integrated, global product and customer management structure;
transforming our upstream energy offering from being predominantly a pump manufacturer into a full service solutions provider that offers high quality, locally accessible aftermarket support; and
expanding our Industrials segment aftermarket revenues as a percentage of Industrials Segment Revenue from approximately 33% in 2014 to 35% in 2016.

We believe the establishment and continued execution of our operational and strategic growth initiatives have positioned our Company for substantial revenue and Adjusted EBITDA growth with continued potential to expand margins.

Our Industries and Products

We operate in the global markets for flow control and air compression products for the industrial, energy and medical industries. Our highly engineered products and proprietary technologies are focused on serving specialized applications within these attractive and growing industries.

Industrials

Our Industrials segment designs, manufactures, markets and services a broad range of air compression, vacuum and blower products across a wide array of technologies and applications. Compression products are used to create varying levels of pressure in order to power machinery, industrial tools, material handling systems and automated equipment. Vacuum products create a range of pressures below atmospheric levels that are critical to many industrial and manufacturing processes such as drying, packaging, forming and aeration. Blower products are utilized to convey high volumes of air and gas at various flow rates and at low pressures, facilitating processes such as waste water aeration, biogas upgrading and conveying, pneumatic transport and dehydration.

Almost every manufacturing and industrial facility, and many service and process industry applications, use air compression, vacuum and blower products in a variety of process-critical applications. Within each of our compression, vacuum and blower product categories, we offer one of the broadest ranges of technologies in the market. The breadth and depth of our product offering creates incremental business opportunities by allowing us to cross-sell our full product portfolio and uniquely address customers’ needs in one complete solution.

Compression Technologies
Vacuum Technologies
Blower Technologies
•   Rotary Screw
•   Liquid Ring
•   Rotary Lobe
•   Reciprocating Piston
•   Claw
•   Screw
•   Scroll
•   Screw
•   Claw & Vane
•   Rotary Vane
•   Rotary Vane
•   Turbo
•   Centrifugal
•   Side Channel
•   Side Channel & Radial

We continue to build on our strong competitive positions across our Industrials product categories. According to Frost & Sullivan, we currently maintain a top three position in the global industrial air compressor market, which is estimated to be a $12.5 billion industry. Furthermore, our management believes that we hold a leading position in our addressable portion of the global markets for vacuum products and blower products.

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The mission-critical nature of our industrial products across manufacturing processes drives a demand environment and outlook that are highly correlated with global and regional industrial production, capacity utilization and long-term GDP growth. In the United States and Europe, we are poised to continue benefiting from expected growth in real GDP according to the International Monetary Fund (the “IMF”), along with an expected rebound in industrial production activity in 2017 and 2018 according to the U.S. Energy Information Administration (the “EIA”). In APAC, despite recent deceleration, GDP growth remains robust, and we believe that we are well-positioned to benefit from future growth in the region, which is estimated by the IMF to be a multiple of anticipated growth in the Americas and EMEA through 2018.

Furthermore, key industry trends that we believe will drive continued growth for our Industrials business are: (i) continuing customer desire for innovation and new technologies; (ii) increasing demand for service and monitoring; (iii) growing focus on comprehensive solutions and total life cycle cost; (iv) rising need for adaptability of products to accommodate new applications; and (v) increasing customer expectations for product reliability combined with superior customer service, quick aftermarket support and regular maintenance to reduce downtime.

Energy

Our Energy segment is one of the largest suppliers of equipment and associated aftermarket parts, consumables and services for the energy market applications that we serve, spanning upstream (petroleum exploration and production), midstream (transport, storage and wholesale marketing of petroleum products), downstream (refining, marketing and distribution of petroleum products) and petrochemical end-markets. The high cost of failure in these applications makes quality and reliability key purchase criteria for end-users and drives demand for our highly engineered and differentiated products.

Upstream

Our sales to upstream energy end-markets consist of positive displacement pumps, fluid ends and other aftermarket parts, consumables and services that are used in oil and gas drilling, hydraulic fracturing and well servicing applications. We believe we are exposed to some of the highest growth market drivers in the context of an upstream energy recovery, particularly in the North American land-based market. First, a significant number of frac pumps were put into service during 2011 and 2012, the replacement of which, we believe, has been deferred beyond typical useful lives due to the recent downturn in upstream energy. We believe that this wave of needed replacements, coupled with widespread deferred maintenance on installed frac pumps, will drive demand in the near-term and over the next several years independent of an upstream energy recovery, and will provide an additional tailwind of growth in the context of such a recovery.

Furthermore, secular industry trends are driving increased demand for and utilization of newer, fit-for-purpose equipment that is highly engineered for demanding applications, and are increasing the frequency of replacement, refurbishment and upgrade cycles of pumping equipment. As a result of an improvement in crude oil prices and the threshold oil and gas prices at which wells are profitable to drill, an increased number of drilling rigs have reentered the market in 2016, which we expect to continue to drive growth. In turn, the associated usage of aftermarket parts and consumables used in drilling and hydraulic fracturing activity is also increasing. The number of wells drilled is growing at a faster rate than active rig count, with each active rig drilling more unconventional wells per unit of time than previously experienced. In addition, each unconventional well, on average, is being drilled with longer lateral well sections, or laterals, and more hydraulic fracturing stages per lateral length. Greater volumes of proppant (particles, such as sand, treated sand or ceramic materials, which operators mix with fluid to hold fissures open during the hydraulic fracturing process) are being used per length of lateral. As a result, multiple industry trends are independently driving demand for frac pumps and frequently replaced aftermarket parts, notably fluid ends, and associated consumables, resulting in a growth profile that is exposed to, but also meaningfully more robust than, underlying growth in active rig count.

Midstream and Downstream

Sales to midstream and downstream energy end-markets consist of liquid ring vacuum pumps and compressors and integrated systems, engineered fluid loading and transfer equipment and associated aftermarket parts and services. We focus on two basic types of midstream and downstream energy equipment: fluid transfer equipment and liquid ring vacuum pumps and compressors, which are employed in the midstream and downstream markets, respectively.

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The U.S. midstream industry’s capital expenditures could exceed $50 billion in 2017, according to The INGAA Foundation, Inc. In addition, according to Petrochemical Update, North American downstream industry capital expenditures are expected to reach $14.5 billion in 2017 and $17.3 billion in 2018, with the maintenance capital expenditure portion for U.S. refineries estimated to increase 39% in 2017 to a total of $1.3 billion. These large investments in midstream and downstream energy end-markets are expected to drive sales of our equipment and future sales of aftermarket parts and services as these facilities age. Further, deferred maintenance of downstream energy infrastructure is expected to drive increased future sales of our replacement products and aftermarket parts and services. Our midstream and downstream products are positioned to capitalize on these large and secularly growing applications, which provide relatively stable demand with attractive, long-term growth potential above GDP.

Petrochemical

Sales to petrochemical end-markets consist of vacuum and compression process systems, both of which are used in harsh, continuous-duty applications.

Demand for our petrochemical industry products correlates with growth in the development of new petrochemical plants as well as activity levels therein, which drive demand for aftermarket parts and services on our market-leading installed base of equipment. According to the American Chemistry Council, U.S. chemical industry capital spending is expected to grow at a 7.5% compound annual growth rate (“CAGR”) from 2016 to 2018. Advancements in the development of unconventional oil and natural gas resources in North America over the past decade have resulted in the abundant availability of locally-sourced natural gas as feedstock for petrochemical plants in North America, supporting long-term growth. In addition, new petrochemical plants are becoming larger and more complex, driving increased demand for more equipment.

Key trends for the Energy segment end-markets include:

Upstream
Midstream and Downstream
Petrochemical
•   Deferred capital expenditures and frac     pump replacement cycle
•   Greater percentage of higher-
    specification drilling rigs (79% in
    2016 vs. 53% in 2010)(1)
•   Growth in U.S. land rig count
    compared to the rest of the world (31%
    U.S. land rig growth vs. 6% for the rest
    of the world on a cumulative basis
    expected through the fourth quarter of
    2017)(2)
•   More wells drilled per rig per year, with
    increasing lateral lengths per well
•   Growth in (and increasing profitability
    of) hydraulic fracturing activity
•   Increased hydraulic fracturing intensity
    (5.0 frac stages per 1,000 ft. expected in
    2017 vs. 3.9 in 2014)(2)
•   Greater volume of proppant used per
    length of lateral
•   Increased production (12% rise in U.S.
    oil and gas production from December
    2013 to December 2016)
•   Increased transportation of hydrocarbons
•   Deferred maintenance capital
    expenditures
•   Inclusion in initial specifications and
    increased size of projects
•   Increased environmental regulations
    creating higher cost of spillage and
    other environmental exposures
•   Petroleum products export growth
•   Increased production (U.S. chemical
    capital spending expected to reach
    $65 billion by 2021 – three times 2010
    spending)(3)
•   Inclusion in initial specifications and
    increased size of projects
•   Abundant availability of locally-sourced
    oil and natural gas as feedstock, due to
    increased domestic U.S. production
(1)Baker Hughes, Inc., February 10, 2017
(2)Spears & Associates, Inc., February 2017
(3)American Chemistry Council, June 2016

Medical

The Medical segment designs, manufactures and markets a broad range of flow control products for the durable medical equipment, laboratory vacuum and automated liquid handling end-markets. Key technologies include gas, liquid and precision syringe pumps and compressors and automated liquid handling systems. We have established a history of innovation that enables us to work closely with our customers to create highly customized flow control solutions for their unique applications. These products are mission-critical in the

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ultimate device in which they are deployed and remain a key component over the entire life cycle of the end products. The regulated market structure and nature of long-tenured customer relationships enables us to have a highly visible, recurring revenue stream from key customers.

We are one of the largest product suppliers in the medical markets we serve. Based on internal estimates, the durable medical equipment pump market represents approximately a $1.2 billion opportunity globally and can be divided into two primary sub-markets: gas pumps and liquid pumps. We estimate the size of the global gas pump market to be approximately $700 million and we estimate the liquid pump market to be a $450 million market globally. Liquid pumps transfer and meter both neutral and chemically aggressive fluids. Further, we believe that overall demand for flow control products and services in the medical space will benefit from attractive secular growth trends, including: (i) aging demographics requiring greater access to medical care; (ii) growth in emerging economies with increased awareness of medical services and greater availability of treatment options; (iii) rising investment in health solutions and safety infrastructures driving demand for medical pump products; (iv) stronger demand for higher healthcare efficiency requiring premium and high performance systems; and (v) increasing demand for durable medical equipment providing significant opportunity for pump products to be incorporated into new applications.

Our Business Transformation from Operational Execution and Strategic Investment

Our top priorities since the KKR Transaction have been creating a performance-driven organization and ensuring superior execution of our operating initiatives in order to transform our business and realize step-change improvements in our commercial and operational capabilities, financial characteristics and performance, pace of innovation and customer service. To support our business transformation, significant investment was dedicated to transformation initiatives across the Company’s three segments, primarily directed toward funding the Company’s growth strategies, further implementation of operational process efficiency actions and permanently reducing operating costs through structural reorganization changes.

Within the Industrials segment, we created an integrated salesforce and established a centralized demand generation team that allows us to maximize revenues across brands, customer accounts and geographies. We also strengthened our customer connectivity by realigning our product engineering and marketing teams into a single global product management structure, and have increased innovation via our new product management process. Furthermore, we significantly increased our profitability by optimizing our footprint and achieving structural cost reductions from back office and administrative areas.

Within the Energy segment, we transformed our upstream energy offering from being predominantly a pump manufacturer into a full-service solutions provider that offers high quality and locally accessible aftermarket support throughout the life cycle of our products. We invested significantly in our sales personnel, marketing strategy, supply chain and manufacturing capabilities, which will allow us to serve our customers better with greater profitability. In particular, we nearly doubled our sales personnel for upstream energy markets since 2012 and increased our service center footprint by 160%, which now covers approximately 85% of U.S. land-based activity. As a result, we believe that we will be even better positioned to capture market share and grow revenues and Segment Adjusted EBITDA independent of an upstream energy recovery, while positioning ourselves to realize significantly increased sales, profitability and customer responsiveness in the context of such a recovery.

The Medical segment was established as a standalone and strategic business in 2013 to accelerate growth, profitability and focused innovation. We upgraded our salesforce and enhanced demand generation efforts to better serve our customers and capture new business, including our recent expansion into automated liquid handling components and systems. Additionally, we also expanded the segment profitability by improving our global sourcing and supply chain strategies and optimizing our global footprint.

The significant operational improvements resulting from the execution of our business transformation initiatives have strengthened performance within each of our segments. We believe the establishment and continued execution of our operational and strategic growth initiatives has positioned our Company for substantial future revenue and Adjusted EBITDA growth, as well as margin expansion.

Our Competitive Strengths

Market Leadership with Strong Brand Portfolio and Reputation Built over 155 Years

With a deep heritage of more than 155 years of leading engineering and application expertise, we believe our portfolio of highly engineered products and proprietary technologies is among the most trusted and

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recognized in the industry. Our product portfolio is sold under more than 20 well-respected brands, most notably Gardner Denver, CompAir, Nash, Emco Wheaton, Robuschi, Elmo Rietschle and Thomas. By utilizing a multi-brand go-to-market strategy, we leverage each specific brand’s market position in well-defined market segments or geographies. We believe each brand’s reputation for superior quality, reliability, efficiency and responsiveness, along with the often application-critical nature of our products within our customers’ operations, enhances our competitive position in the marketplace and is difficult to replicate given the length of time over which these brand reputations have developed. The strength of our brand portfolio is demonstrated by our leading global market share positions. We believe we have leading market positions within each of our operating segments.

Comprehensive Portfolio of Highly Engineered, Innovative and Application-Critical Equipment

We design, manufacture, market and service a broad array of application-critical flow control and compression equipment for customers seeking targeted solutions for specialized end-markets. Our products typically are part of large, complex systems and represent mission-critical components in the context of the broader systems in which they are utilized. In addition, our products often operate in harsh environments and specialized, precision applications such as in regulated end-markets, where customers require products capable of reliable performance in complex processes. Furthermore, while our products typically represent a low relative cost in the context of the broader applications in which they are employed, the high cost of failure in these applications makes quality and reliability key purchase criteria for end-users and drives demand for highly engineered and differentiated products. As a result, our customers value our product offerings on the basis of superior quality, reliability, efficiency and advanced technology. In addition, we believe the fact that we offer one of the broadest ranges of compressor, pump, vacuum and blower products in our markets allows us to provide differentiated product and service offerings to our customers, and creates incremental business opportunities by enabling us to cross-sell our full product portfolio. Finally, our product engineering teams are continuously enhancing our existing products and developing new applications to strengthen relationships with our growing base of customers that require advanced solutions.

Installed Base and Growing Aftermarket Platform Drives Highly Profitable Recurring Revenues

Our large installed base of products in our Industrials and Energy segments drives demand for recurring aftermarket revenue streams. Due to the critical applications in which our products are used and the high cost of failure or equipment downtime for our customers, we benefit from a consistent and time-sensitive demand for our portfolio of aftermarket parts, as well as service and repair capabilities. In the Industrials segment for example, on average, the life expectancy of a compressor is between 10 and 12 years. However, a customer typically services the compressor at regular intervals, starting within the first two years of purchase and continuing throughout the life of the product. The cumulative aftermarket revenue generated by a compressor over the product’s life cycle will typically exceed its original cost. In the Energy segment, for example, fluid ends, which are key aftermarket parts used in hydraulic fracturing operations, represent approximately 30% of the original cost of the pump and need to be replaced approximately four times per year on each operating pump (depending on the basin and operating nature of the hydraulic fracturing fleet). Other aftermarket parts, such as plungers, and consumables, such as valves, seats and packing, are replaced on even shorter time frames, creating aftermarket opportunities which, in aggregate, are often multiples of the cost of the original pump. Aftermarket sales in 2016 represented approximately 40% of our aggregate Industrials and Energy segments’ revenue.

Diversified Business with Attractive End-markets

Our revenue and earnings are diversified by product, geography, end-market and customer. In addition, we are well-positioned to benefit from secular trends in large, attractive developed economies and fast-growing emerging markets. We believe that our balanced revenue base across end-markets and exposure to early-, mid- and late-cycle growth drivers, along with the specialty nature of the applications on which we focus, enables us to reduce volatility in earnings across economic cycles. Many of our customers operate in attractive end-markets that benefit from secular trends including: (i) continued developed and emerging market growth and infrastructure build; (ii) accelerating land-based U.S. energy activity; (iii) efficiency driven upgrades of industrial systems; (iv) increasing demand for healthcare; (v) increasing complexity of oil and gas extraction; (vi) demand for improved water quality and access; and (vii) heightened environmental regulations. Our value-added services over the life cycle of our products reinforce our customer relationships and position our business for continued growth.

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Expertise, Footprint and Expanded Product Portfolio to Capture Recovery in Upstream Energy

Our Energy business manufactures pumps and associated aftermarket parts and consumables used in oil and gas drilling, hydraulic fracturing and well servicing applications. Furthermore, our upstream energy service network now covers approximately 85% of active U.S. land drilling activity as a result of our investment in a 160% increase in our service and repair facility locations since 2012. Even during the recent upstream energy industry downturn, when many of our competitors were closing facilities and cutting back investments, we continued investing in our capabilities within the energy markets. As a result of our investments, as well as our estimated leading global frac pump market position based on new unit sales over the past three years, we believe that we will be even better positioned to capture market share and grow revenues and Segment Adjusted EBITDA independent of an upstream energy recovery, while positioning ourselves to realize significantly increased sales, profitability and customer responsiveness in the context of such a recovery.

Highly Attractive Financial Profile

We participate in markets with attractive near- and long-term growth trends, and our business generates strong Adjusted EBITDA margins. For the year ended December 31, 2016, each of our segments had Segment Adjusted EBITDA margins above 20%: 20.1% in our Industrials segment, 22.9% in our Energy segment and 27.1% in our Medical segment. The power of our financial profile is evidenced by the Company maintaining approximately the same Adjusted EBITDA margins from 2014 to 2016, despite significant headwinds from external market factors, including the oil and gas depression and foreign exchange. Our financial profile and cash flow generation are further enhanced by our low capital requirements, as demonstrated by our capital expenditures averaging approximately 3% of revenues over the last three years. Our margin profile and low capital intensity have resulted in strong and stable free cash flows that we believe will enable us to continue to reduce our indebtedness, deploy our capital to fund strategic initiatives to drive innovation and organic growth opportunities and finance value-enhancing acquisitions. We believe that our financial profile, which has been enhanced by our business transformation, reflects a strong and attractive business with potential for significant earnings growth over time.

Strength of Our Diverse, Long-Standing Customer Relationships

We serve a large number of well-established blue-chip customers who are globally recognized in the industries in which they operate, as well as regional and local customers, across a wide array of end-markets. In 2016, no single customer represented more than 2% of our total revenues, and our top 10 customers represented less than 10% of total revenues. We are known for product quality, reliability, efficiency and superior customer service. These attributes, along with over 155 years of engineering heritage, generate strong brand loyalty for our products and foster long-standing customer relationships, as highlighted by the fact that our top 10 customers have been with the Company for an average of 26 years.

Strategically Positioned Global Manufacturing Footprint

We have one of the most extensive manufacturing and service networks in the industry with 37 key manufacturing facilities and an expansive network of more than 30 complementary service and repair centers across six continents. We believe our extensive manufacturing and service footprint is a competitive advantage that allows us to source new business, provide superior customer service and more efficiently develop new products to serve our customers’ needs. Our expansive global footprint also allows us to optimize our manufacturing cost structure, by combining local manufacturing assets with the capability to leverage our footprint in lower cost geographies. We believe our worldwide presence enables us to provide timely and responsive support to our customers, many of whom operate internationally, and to capitalize on growth opportunities in both developed and emerging markets. Because of the critical nature of the applications in which our products are used, expedient response times are important to capturing and retaining our customers’ business.

Proven Strategy to Drive Operational Excellence

Our top priorities since the KKR Transaction have been creating a performance-driven culture and ensuring superior execution of our operating initiatives in order to transform our business and realize step-change improvements in our commercial and operational capabilities, financial characteristics and performance, pace of

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innovation and customer service. The implementation of our operational excellence initiatives has significantly improved our performance. We view operational excellence as a holistic approach to continuous improvement that spans our entire organization from manufacturing to sales and marketing to customer service. We believe this approach will drive strong revenue and earnings growth.

Highly Experienced Management Team with Track Record of Success

We invested in attracting a high-caliber senior management team with an average of 23 years of experience in relevant industries. In addition, 45% of our top 100 business managers, including the senior management team, have joined the Company since the KKR Transaction, which we believe added a significant new level of talent to our leadership team. We believe our current management team comprises individuals with the extensive operational, financial and managerial experience needed to effectively navigate the key opportunities and challenges facing our business today and has been responsible for developing and executing our business transformation. Our management team has a demonstrated track record of growth via operational improvements and strategic growth initiatives, and we believe that we have a strong, deep bench of talented leaders who are well-positioned to continue driving the Company towards profitable growth and margin expansion.

Our Growth Strategies

We intend to continue to drive shareholder value through the pursuit of best-in-class financial performance, consistent improvement in profitability and our ability to develop and retain world-class talent. Across all three of our segments, our comprehensive strategy to drive strong revenue and earnings growth is centered on five primary objectives: (i) enhancing commercial leadership by expanding our sales and service presence, adding product line adjacencies and accelerating our innovation funnel; (ii) driving aftermarket sales penetration of our large installed base; (iii) further improving our competitive position with our customers through salesforce effectiveness programs; (iv) executing our operational excellence initiatives to streamline our cost structure and support margin expansion, including through manufacturing footprint optimization, administrative expense efficiency and strategic sourcing; and (v) pursuing acquisitions focused on bolstering our product offerings and/or geographic or market presence. Specifically, we intend to focus on four primary growth strategies.

Accelerate Industrials Growth through Salesforce Effectiveness and Innovation and Drive Continued Margin Expansions by Focusing on Operational Excellence

Our salesforce effectiveness initiatives continue to support our ability to be increasingly responsive to our customers and cross-sell our comprehensive portfolio of market-leading products and services into existing and new applications. In addition, our demand generation platform allows for increased connectivity with our customer base, as we are utilizing integrated technology to develop more actionable leads for our salesforce. Over time, we expect these efforts to enhance product awareness and generate new customer wins. We also expect to expand our market share by growing in key emerging markets, specifically Asia, the Middle East and South America, which were previously underserved regions for the Industrials segment. In addition, the redesigned approach to product management within the Industrials segment is resulting in a greater pace of innovation leading to a growing pipeline of new products that we expect to commercialize over the coming years. Supplementing our commercial and innovation efforts is a focus on continued margin expansion. We are building upon our global operational excellence programs with a distinct focus on simplifying the way we conduct business. We believe we have significant potential for near- and long-term revenue and earnings growth and margin expansion through the continued execution of these initiatives.

Capitalize on Transformative Investments in Our Energy Segment and Benefit from a Recovery in Key Energy Markets

We optimized our Energy segment footprint and business model to sustain profitability while enhancing the upside of our earnings capacity in an upstream energy recovery. As a result of our substantial investment in the capabilities of our upstream energy business, we believe that we significantly increased our addressable market and overall earnings capacity relative to like-for-like activity levels in the 2014 and prior time period. Independent of an upstream energy recovery, we believe that we are poised to capture favorable trends including pent-up demand for repairs and new parts due to deferred maintenance during the downturn, a significant wave of replacement demand from pumps installed over five years ago and share gain due to our enhanced presence and new product capabilities. In the context of an upstream energy recovery, we believe that these factors will

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contribute to driving even more growth upside than from the activity growth alone, and that we will generate substantially more revenue and profitability given our increased earnings capacity and operational improvements, such as the expansion of our service network. In the midstream, downstream and process industries, we believe our business will benefit from attractive long-term secular trends, including the increased global movement of hydrocarbons and other liquid commodities and expanded capacity of process industries.

Accelerate Growth and Enhance Market Share and Industry Presence of Our Medical Segment

We strategically invested in our Medical segment in order to expand sales and profitability. We believe a combination of our enhanced sales force, improved demand creation and recently implemented CRM platform, combined with our global manufacturing and sales footprint, will continue to position our Company to expand market share. Building on our strength in gas pump applications, we recently expanded into the liquid pump and automated liquid handling markets to gain share in sizable markets that were previously unaddressed by us. We view this space as an attractive adjacency to our existing strategy and one in which we are able to capture share in line with current operations in the gas pump market, building momentum and scale for our Medical business.

Pursue Complementary Acquisitions

In addition to our organic initiatives for each of our segments, we plan to pursue select strategic acquisition opportunities as part of our growth strategy. Our markets are fragmented and there is opportunity for continued consolidation within our industrial, energy and medical markets. Based on management estimates, approximately half of each such market consists of smaller players who maintain less than 5% market share. We have consistently employed a disciplined approach to acquisitions focused on opportunities that (i) strengthen our existing portfolio through the addition of new technologies, (ii) allow us to establish new flow control platforms in attractive markets, (iii) enhance our aftermarket offerings, (iv) grow our presence in strategic geographies, such as select emerging markets and/or (v) provide opportunity to realize synergies while expanding or strengthening our capabilities.

Risks Related to Our Business and this Offering

Investing in our common stock involves substantial risk, and our ability to successfully operate our business is subject to numerous risks. Risk factors related to our business include the following:

We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.
More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.
Our revenues and operating results, especially in the Energy segment, depend on the level of activity in the energy industry, which is significantly affected by volatile oil and gas prices.
Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.
Potential governmental regulations restricting the use of hydraulic fracturing could reduce demand for our products.
We face competition in the markets we serve, which could materially and adversely affect our operating results.
Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability, or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.
Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.
Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.

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Our success depends on our executive management and key personnel.
If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.

Any of the factors set forth under “Risk Factors” may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under “Risk Factors” in deciding whether to invest in our common stock.

Corporate History and Information

On July 30, 2013, we were acquired by an affiliate of the Sponsor, pursuant to an agreement and plan of merger among Gardner Denver Holdings, Inc. (formerly known as Renaissance Parent Corp.), Renaissance Acquisition Corp. and Gardner Denver, Inc. Total cash consideration payable in connection with the KKR Acquisition was approximately $3.8 billion. Gardner Denver Holdings, Inc. was incorporated in Delaware on March 1, 2013 by affiliates of the Sponsor.

Our principal executive offices are located at 222 East Erie Street, Milwaukee, Wisconsin 53202, Suite 500. The telephone number of our principal executive offices is (414) 212-4700. Our Internet address is www.gardnerdenver.com. Information on our web site is not incorporated by reference into this prospectus and does not constitute part of this prospectus.

About Our Sponsor

Founded in 1976 and led by Henry Kravis and George Roberts, KKR & Co. is a leading investment firm with $137.6 billion in assets under management as of March 31, 2017. With offices around the world, KKR & Co. manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR & Co. seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR & Co. complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platforms. KKR & Co. has been an active investor in the U.S. industrials sector since 2010, having acquired Capsugel, Capital Safety, Gardner Denver, The Crosby Group and CHI Overhead Doors for an aggregate purchase price of approximately $9.1 billion and total equity capital invested of approximately $3.6 billion. KKR & Co. L.P. is publicly traded on The New York Stock Exchange (NYSE: KKR).

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The Offering

Common stock offered by us
41,300,000 shares.
Option to purchase additional shares of common stock
We have granted the underwriters a 30-day option from the date of this prospectus to purchase up to 6,195,000 additional shares of our common stock at the initial public offering price, less underwriting discounts and commissions.
Common stock to be outstanding immediately after this offering
189,732,248 shares (or 195,927,248 shares if the underwriters exercise in full their option to purchase additional shares).
Use of proceeds
We estimate that our net proceeds from the sale of the common stock that we are offering, after deducting the estimated underwriting discounts and commissions, will be approximately $780.6 million (or approximately $897.7 million, if the underwriters exercise in full their option to purchase additional shares). See “Use of Proceeds.”

We intend to use the net proceeds from this offering to redeem all $575.0 million aggregate principal amount of our 6.875% senior unsecured notes due 2021 (the “Senior Notes”), including applicable premiums, to repay $159.6 million of borrowings under our Dollar Term Loan Facility (as defined below) and to pay certain expenses relating to this offering.

Risk factors
See “Risk Factors” beginning on page 17 and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Dividend policy
After completion of this offering, we do not intend to pay cash dividends on our common stock. We may, in the future, decide to pay dividends on our common stock, subject to the discretion of our board of directors and other factors. In the event we decide to pay dividends in the future, our ability to pay dividends will be limited by covenants in our Senior Secured Credit Facilities (as defined below). See “Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”
Conflicts of Interest
Affiliates of our Sponsor beneficially own (through investment in KKR Renaissance Aggregator L.P.) in excess of 10% of our issued and outstanding common stock. Because KKR Capital Markets LLC, an affiliate of our Sponsor, is an underwriter, this offering is being made in compliance with the requirements of Rule 5121 of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Pursuant to that rule, the appointment of a “qualified independent underwriter” is not required in connection with this offering as

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KKR Capital Markets LLC is not primarily responsible for managing this offering. KKR Capital Markets LLC will not confirm sales of the securities to any account over which it exercises discretionary authority without the specific written approval of the account holder. See “Underwriting (Conflicts of Interest).”

NYSE ticker symbol
“GDI”

Unless we indicate otherwise or the context otherwise requires, this prospectus reflects and assumes the following:

the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws immediately prior to the consummation of this offering;
our 1.6331-for-one reverse split of our common stock, which occurred on April 27, 2017; and
no exercise by the underwriters of their option to purchase 6,195,000 additional shares of our common stock.

Additionally, the number of shares of our common stock to be outstanding after this offering is based on the number of shares of our common stock outstanding as of March 31, 2017 and excludes: 11,629,881 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2017 at a weighted average exercise price of $8.90 per share; 932,380 shares of common stock that may be issued upon the exercise of stock appreciation rights (“SARs”) outstanding as of March 31, 2017 at a weighted average strike price of $8.60 per share, although we currently expect all SARs to be settled in cash; 737,769 shares of common stock issuable upon the exercise of options that are expected to be granted prior to the consummation of this offering, with an exercise price per share equal to the initial public offering price; and approximately 5,515,000 shares of common stock issuable upon the settlement of deferred stock units (“DSUs”) to be granted in connection with this offering, in each case granted under our 2013 Stock Incentive Plan (the “2013 Stock Incentive Plan”); and 8,550,000 shares of common stock reserved for issuance under our 2017 Omnibus Incentive Plan (the “2017 Stock Incentive Plan”).

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Summary Historical Consolidated Financial and Other Data

Set forth below is our summary historical consolidated financial and other data as of the dates and for the periods indicated. The summary historical financial data as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014 have been derived from our audited consolidated financial statements and related notes thereto included elsewhere in this prospectus, and the summary historical financial data as of December 31, 2014 have been derived from our historical consolidated financial statements not included in this prospectus. We have derived the summary historical consolidated financial data as of March 31, 2017 and for each of the three months ended March 31, 2017 and March 31, 2016 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus, which have been prepared on the same basis as our audited consolidated financial statements. Share and per share data in the table below has been retroactively adjusted to give effect to the 1.6331-for-one stock split, which occurred on April 27, 2017. The results of operations for any period are not necessarily indicative of the results to be expected for any future period. See “Risk Factors” and the notes to our consolidated financial statements included elsewhere in this prospectus.

The summary historical consolidated financial and other data should be read in conjunction with, and are qualified by reference to, “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus.

 
Three Months Ended
March 31,
Year Ended December 31,
(in millions, except share and per share amounts)
2017
2016
2016
2015
2014(1)
Consolidated Statements of Operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
481.7
 
$
437.1
 
$
1,939.4
 
$
2,126.9
 
$
2,570.0
 
Cost of sales
 
307.1
 
 
278.2
 
 
1,222.7
 
 
1,347.8
 
 
1,633.2
 
Gross profit
 
174.6
 
 
158.9
 
 
716.7
 
 
779.1
 
 
936.8
 
Selling and administrative expenses
 
102.4
 
 
103.1
 
 
414.3
 
 
427.0
 
 
476.0
 
Amortization of intangible assets
 
27.6
 
 
29.6
 
 
124.2
 
 
115.4
 
 
113.3
 
Impairment of goodwill
 
 
 
 
 
 
 
343.3
 
 
220.6
 
Impairment of other intangible assets
 
 
 
 
 
25.3
 
 
78.1
 
 
14.4
 
Other operating expense, net
 
7.9
 
 
6.6
 
 
48.6
 
 
20.7
 
 
64.3
 
Operating income (loss)
 
36.7
 
 
19.6
 
 
104.3
 
 
(205.4
)
 
48.2
 
Interest expense
 
45.9
 
 
43.0
 
 
170.3
 
 
162.9
 
 
164.4
 
Other income, net
 
(0.6
)
 
(0.3
)
 
(2.8
)
 
(1.6
)
 
(3.3
)
Loss before income taxes
 
(8.6
)
 
(23.1
)
 
(63.2
)
 
(366.7
)
 
(112.9
)
(Benefit) provision for income taxes
 
(1.6
)
 
(13.2
)
 
(31.9
)
 
(14.7
)
 
23.0
 
Net loss
 
(7.0
)
 
(9.9
)
 
(31.3
)
 
(352.0
)
 
(135.9
)
Less: Net income (loss) attributable to noncontrolling interests
 
 
 
(0.3
)
 
5.3
 
 
(0.8
)
 
(0.9
)
Net loss attributable to Gardner Denver Holdings, Inc.
$
(7.0
)
$
(9.6
)
$
(36.6
)
$
(351.2
)
$
(135.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss per share, basic and diluted
$
(0.05
)
$
(0.06
)
$
(0.25
)
$
(2.35
)
$
(0.91
)
Weighted average shares, basic and diluted (in thousands)
 
148,504
 
 
148,735
 
 
149,184
 
 
149,646
 
 
148,883
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Cash Flow Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows – operating activities
$
(2.6
)
$
30.7
 
$
165.6
 
$
172.1
 
$
141.8
 
Cash flows – investing activities
 
(16.6
)
 
(10.5
)
 
(82.1
)
 
(84.0
)
 
(155.4
)
Cash flows – financing activities
 
(13.3
)
 
(17.5
)
 
(43.0
)
 
(35.0
)
 
(3.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data (at period end):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
225.6
 
 
 
 
$
255.8
 
$
228.3
 
$
184.2
 
Total assets
 
4,312.6
 
 
 
 
 
4,316.0
 
 
4,462.0
 
 
5,107.1
 
Total liabilities
 
4,028.9
 
 
 
 
 
4,044.2
 
 
4,056.5
 
 
4,218.5
 
Total stockholders’ equity
 
283.7
 
 
 
 
 
271.8
 
 
405.5
 
 
888.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Financial Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA(2)
$
92.1
 
$
76.8
 
$
400.7
 
$
418.9
 
$
537.6
 
Adjusted Net Income(2)
 
20.1
 
 
18.1
 
 
133.6
 
 
128.1
 
 
229.9
 
Capital expenditures
 
16.4
 
 
10.7
 
 
74.4
 
 
71.0
 
 
73.5
 
Free Cash Flow(2)
 
(19.0
)
 
20.0
 
 
91.2
 
 
101.1
 
 
68.3
 

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(1)Debt issuance costs have been reclassified in the period ended December 31, 2014 from total assets to total liabilities in accordance with ASU 2015-13 to conform with the presentation of the periods ended December 31, 2016 and December 31, 2015.
(2)We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). To supplement this information, we also use the following measures in this prospectus: “Adjusted EBITDA,” “Adjusted Net Income” and “Free Cash Flow.” Management believes that Adjusted EBITDA and Adjusted Net Income are helpful supplemental measures to assist us and investors in evaluating our operating results as they exclude certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA represents net (loss) income before interest, taxes, depreciation and amortization, as further adjusted to exclude certain non-cash, non-recurring and other adjustment items. We believe that the adjustments applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that we do not expect to continue at the same level in the future. Adjusted Net Income is defined as net income (loss) including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions.
   We use Free Cash Flow to review the liquidity of our operations. We measure Free Cash Flow as cash flows from operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments and to service our debt. Free Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.
   As a result, we and our board of directors regularly use these measures as tools in evaluating our operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measure under GAAP. In addition, we believe that Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are frequently used by investors, analysts and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income and Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity. Other companies in our industry may calculate Adjusted EBITDA, Adjusted Net Income and Free Cash Flow differently from us, limiting their usefulness as comparative measures.
   Adjusted EBITDA, Adjusted Net Income and Free Cash Flow should not be considered as alternatives to net income (loss) or other performance measures calculated in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA, Adjusted Net Income and Free Cash Flow have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.
   Set forth below are the reconciliations of net loss to Adjusted EBITDA and Adjusted Net Income and cash flows from operating activities to Free Cash Flow.
 
Three Months Ended
March 31,
Year Ended December 31,
(in millions)
2017
2016
2016
2015
2014
Net loss
$
(7.0
)
$
(9.9
)
$
(31.3
)
$
(352.0
)
$
(135.9
)
Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
45.9
 
 
43.0
 
 
170.3
 
 
162.9
 
 
164.4
 
(Benefit) provision for income taxes
 
(1.6
)
 
(13.2
)
 
(31.9
)
 
(14.7
)
 
23.0
 
Depreciation expense
 
12.1
 
 
11.6
 
 
48.5
 
 
47.6
 
 
47.1
 
Amortization expense(a)
 
27.6
 
 
29.6
 
 
124.2
 
 
115.4
 
 
113.3
 
Impairment of goodwill and other intangible assets(b)
 
 
 
 
 
25.3
 
 
421.4
 
 
235.0
 
Sponsor fees(c)
 
1.1
 
 
1.0
 
 
4.8
 
 
4.6
 
 
3.7
 
Restructuring and related business transformation costs(d)
 
8.6
 
 
9.3
 
 
78.7
 
 
31.4
 
 
36.6
 
Acquisition related expenses and non-cash charges(e)
 
0.7
 
 
0.8
 
 
4.3
 
 
4.8
 
 
9.8
 
Environmental remediation loss reserve(f)
 
1.0
 
 
 
 
5.6
 
 
 
 
 
Other adjustments(g)
 
3.7
 
 
4.6
 
 
2.2
 
 
(2.5
)
 
40.6
 
Adjusted EBITDA
$
92.1
 
$
76.8
 
$
400.7
 
$
418.9
 
$
537.6
 
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
45.9
 
 
43.0
 
 
170.3
 
 
162.9
 
 
164.4
 
Income tax provision, as adjusted(h)
 
12.2
 
 
2.2
 
 
34.7
 
 
71.9
 
 
91.7
 
Depreciation expense
 
12.1
 
 
11.6
 
 
48.5
 
 
47.6
 
 
47.1
 
Amortization of non-acquisition related intangible assets
 
1.8
 
 
1.9
 
 
13.6
 
 
8.4
 
 
4.5
 
Adjusted Net Income
$
20.1
 
$
18.1
 
$
133.6
 
$
128.1
 
$
229.9
 
Free Cash Flow
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows – operating activities
$
(2.6
)
$
30.7
 
$
165.6
 
$
172.1
 
$
141.8
 
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
16.4
 
 
10.7
 
 
74.4
 
 
71.0
 
 
73.5
 
Free Cash Flow
$
(19.0
)
$
20.0
 
$
91.2
 
$
101.1
 
$
68.3
 
(a)Represents $25.8 million, $27.7 million, $110.6 million, $107.0 million and $108.8 million of amortization of intangible assets arising from the KKR Transaction and other acquisitions (customer relationships and trademarks) and $1.8 million, $1.9 million, $13.6 million, $8.4 million and $4.5 million of amortization of non-acquisition related intangible assets, in each case for the three months ended March 31, 2017, the three months ended March 31, 2016 and the years ended 2016, 2015 and 2014, respectively.
(b)Represents non-cash charges for impairment of goodwill and other intangible assets.

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(c)Represents management fees paid to our Sponsor pursuant to a monitoring agreement. In connection with the offering, the monitoring agreement will be terminated in accordance with its terms and we expect to pay a termination fee equal to approximately $16.2 million. See “Certain Relationships and Related Party Transactions—Arrangements with Our Sponsor—Monitoring Agreement.”
(d)Restructuring and related business transformation costs consist of the following:
 
Three Months Ended
March 31,
Year Ended December 31,
(in millions)
2017
2016
2016
2015
2014
Restructuring charges
$
1.7
 
$
1.4
 
$
32.9
 
$
4.7
 
$
5.9
 
Severance, sign-on, relocation and executive search costs
 
1.0
 
 
5.1
 
 
22.4
 
 
18.4
 
 
15.5
 
Facility reorganization, relocation and other costs
 
1.1
 
 
0.7
 
 
8.7
 
 
1.6
 
 
0.4
 
Information technology infrastructure transformation
 
0.7
 
 
0.1
 
 
2.3
 
 
 
 
 
Losses (gains) on asset and business disposals
 
3.0
 
 
(0.1
)
 
0.1
 
 
(4.5
)
 
1.0
 
Consultant and other advisor fees
 
0.4
 
 
1.6
 
 
9.7
 
 
10.1
 
 
13.8
 
Other, net
 
0.7
 
 
0.5
 
 
2.6
 
 
1.1
 
 
 
Total restructuring and related business transformation costs
$
8.6
 
$
9.3
 
$
78.7
 
$
31.4
 
$
36.6
 
(e)Represents costs associated with successful and/or abandoned acquisitions, including third-party expenses, post-closure integration costs and non-cash charges and credits arising from fair value purchase accounting adjustments.
(f)Represents estimated environmental remediation costs and losses relating to a former production facility.
(g)Includes (i) foreign exchange gains and losses, (ii) non-cash impact of net LIFO reserve adjustments, (iii) effects of amortization of prior service costs and amortization of gains in pension and other postemployment benefits (OPEB) expense, (iv) certain legal and compliance costs, (v) shareholder litigation settlement loss ($30.0 million in 2014), (vi) costs to exit and settle loss contracts ($10.1 million in 2014) and (vii) other miscellaneous adjustments.
(h)Represents our income tax provision adjusted for the tax effect of pre-tax items excluded from Adjusted Net Income and the removal of the applicable discrete tax items. The tax effect of pre-tax items excluded from Adjusted Net Income is computed using the statutory tax rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances. Discrete tax items include changes in tax laws or rates, changes in uncertain tax positions relating to prior years and changes in valuation allowances.

Income tax provisions, as adjusted for each of the periods presented below consists of the following:

 
Three Months Ended
March 31,
Year Ended December 31,
(in millions)
2017
2016
2016
2015
2014
(Benefit) provision for income taxes
$
(1.6
)
$
(13.2
)
$
(31.9
)
$
(14.7
)
$
23.0
 
Tax impact of pre-tax income adjustments
 
12.8
 
 
14.6
 
 
71.8
 
 
76.7
 
 
70.9
 
Discrete tax items
 
1.0
 
 
0.8
 
 
(5.2
)
 
9.9
 
 
(2.2
)
Income tax provision, as adjusted
$
12.2
 
$
2.2
 
$
34.7
 
$
71.9
 
$
91.7
 

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RISK FACTORS

An investment in our common stock involves risk. You should carefully consider the following risks as well as the other information included in this prospectus, including “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto, before investing in our common stock. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. The selected risks described below, however, are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. In such a case, the trading price of the common stock could decline and you may lose all or part of your investment.

Risks Related to Our Business

We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.

Our financial performance depends, in large part, on conditions in the markets we serve and on the general condition of the global economy, which impacts these markets. Any sustained weakness in demand for our products and services resulting from a contraction or uncertainty in the global economy could adversely impact our revenues and profitability.

In addition, we believe that many of our suppliers and customers access global credit markets to provide liquidity, and in some cases, utilize external financing to purchase products or finance operations. If our customers are unable to access credit markets or lack liquidity, it may impact customer demand for our products and services.

Furthermore, our products are sold in many industries, some of which are cyclical and may experience periodic contractions. For example, weakness in upstream energy activity in North America significantly impacted our business in 2015 and 2016. Cyclical weakness in the industries that we serve could adversely affect demand for our products and affect our profitability and financial performance.

More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.

For the year ended December 31, 2016, approximately 64% of our revenues were from customers in countries outside of the United States. We have manufacturing facilities in Germany, the United Kingdom, China, Finland, Italy, India and other countries. We intend to continue to expand our international operations to the extent that suitable opportunities become available. Non-U.S. operations and United States export sales could be adversely affected as a result of: political or economic instability in certain countries; differences in foreign laws, including increased difficulties in protecting intellectual property and uncertainty in enforcement of contract rights; credit risks; currency fluctuations, in particular, changes in currency exchange rates between the U.S. dollar, Euro, British Pound and the Chinese Renminbi; exchange controls; changes in tariff restrictions; significant changes in import/export trade restrictions; royalty and tax increases; nationalization of private enterprises; civil unrest and protests, strikes, acts of terrorism, war or other armed conflict; shipping products during times of crisis or war; and other factors inherent in foreign operations.

In addition, our expansion into new countries may require significant resources and the efforts and attention of our management and other personnel, which will divert resources from our existing business operations. As we expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these risks associated with our international operations.

Our revenues and operating results, especially in the Energy segment, depend on the level of activity in the energy industry, which is significantly affected by volatile oil and gas prices.

Demand for certain products of our Energy segment, particularly in the upstream energy market, depends on the level of activity in oil and gas exploration, development and production, and is primarily tied to the number of working and available drilling rigs, number of wells those rigs drill annually, the amount of hydraulic fracturing horsepower required on average to fracture each well and, ultimately, oil and natural gas prices overall. The energy market is volatile as the worldwide demand for oil and natural gas fluctuates. Generally, when

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worldwide demand or our customers’ expectations of future prices for these commodities are depressed, the demand for our products used in drilling and recovery applications is reduced. Other factors, including availability of quality drilling prospects, exploration success, relative production costs and political and regulatory environments are also expected to affect the demand for our products. Worldwide military, political and economic events have in the past contributed to oil and gas price volatility and are likely to do so in the future. Accordingly, our operating results for any particular period are not necessarily indicative of the operating results for any future period as the markets for our products have historically experienced volatility. In particular, orders in the Energy segment have historically corresponded to demand for oil and gas and petrochemical products and have been influenced by prices and inventory levels for oil and natural gas, rig count, number of wells those rigs drill annually, the amount of hydraulic fracturing horsepower required on average to fracture each well and other economic factors which we cannot reasonably predict. The Energy segment generated approximately 37% and 32% of our consolidated revenues for the three months ended March 31, 2017 and for the year ended December 31, 2016, respectively.

Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.

We conduct our business in many different currencies. A significant portion of our revenue, approximately 61% for the year ended December 31, 2016, is denominated in currencies other than the U.S. dollar. Accordingly, currency exchange rates, and in particular unfavorable movement in the exchange rates between U.S. dollars and Euros, British Pounds and Chinese Renminbi, affect our operating results. The effects of exchange rate fluctuations on our future operating results are unpredictable because of the number of currencies in which we do business and the potential volatility of exchange rates. We are also subject to the risks of currency controls and devaluations. Although historically not significant, if currency controls were enacted in countries where the Company generates significant cash balances, these controls may limit our ability to convert currencies into U.S. dollars or other currencies, as needed, or to pay dividends or make other payments from funds held by subsidiaries in the countries imposing such controls, which could adversely affect our liquidity. Currency devaluations could also negatively affect our operating margins and cash flows.

Potential governmental regulations restricting the use, and increased public attention to and litigation regarding the impacts, of hydraulic fracturing or other processes on which it relies could reduce demand for our products.

Oil and natural gas extracted from unconventional sources, such as shale, tight sands and coal bed methane, frequently requires hydraulic fracturing. Recent initiatives to study, regulate or otherwise restrict hydraulic fracturing and processes on which it relies, such as water disposal, as well as litigation over hydraulic fracturing impacts, could adversely affect some of our customers and their demand for our products, which could have a material adverse effect on our business, results of operations and financial condition.

For example, although hydraulic fracturing currently is generally exempt from regulation under the U.S. Safe Drinking Water Act’s (“SDWA”) Underground Injection Control program and is typically regulated by state oil and natural gas commissions or similar agencies, several federal agencies have asserted regulatory authority over certain aspects of the process. These include, among others, a number of regulations issued and other steps taken by the U.S. Environmental Protection Agency (“EPA”) over the last five years, including its New Source Performance Standards issued in 2012, its June 2016 rules establishing new emissions standards for methane and additional standards for volatile organic compounds from certain new, modified and reconstructed equipment and processes in the oil and natural gas source category and its June 2016 rule prohibiting the discharge of wastewater from onshore unconventional oil and natural gas extraction facilities to publicly owned wastewater treatment plants; and the federal Bureau of Land Management (“BLM”) rule in March 2015 that established new or more stringent standards relating to hydraulic fracturing on federal and American Indian lands (which in June 2016 was ruled to be outside of the BLM’s authority by a U.S. federal judge, a decision that the BLM under the Obama administration appealed). While the newly appointed EPA administrator and the Trump administration more generally have indicated their interest in scaling back or rescinding regulations (including the BLM rule referred to above) that inhibit the development of the U.S. oil and gas industry, it is difficult to predict the extent to which such policies will be implemented or the outcome of any litigation challenging such implementation.

Moreover, some states and local governments have adopted, and other governmental entities are considering adopting, regulations that could impose more stringent requirements on hydraulic fracturing operations. For

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example, Texas, Colorado and North Dakota among others have adopted regulations that impose new or more stringent permitting, disclosure, disposal and well construction requirements on hydraulic fracturing operations. States could also elect to prohibit high volume hydraulic fracturing altogether, following the approach taken by the State of New York in 2015. Local land use restrictions, such as city ordinances, may restrict drilling in general and hydraulic fracturing in particular. Some state and federal regulatory agencies have also recently focused on a connection between the operation of injection wells used for oil and natural gas waste disposal and seismic activity. Similar concerns have been raised that hydraulic fracturing may also contribute to seismic activity. In March 2016, the United States Geological Survey identified six states with the most significant hazards from induced seismicity, including Oklahoma, Kansas, Texas, Colorado, New Mexico and Arkansas. In light of these concerns, some state regulatory agencies have modified their regulations or issued orders to address induced seismicity. For example, in December 2016, the Oklahoma Corporation Commission’s Oil and Gas Conservation Division (the “OCC Division”) and the Oklahoma Geologic Survey released well completion seismicity guidance, which requires operators to take certain prescriptive actions, including mitigation, following anomalous seismic activity within 1.25 miles of hydraulic fracturing operations; and in February 2017, the OCC Division issued an order limiting future increases in the volume of oil and natural gas wastewater injected into the ground in an effort to reduce earthquakes in the state. Ongoing lawsuits have also alleged that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal. Increased regulation and attention given to induced seismicity could lead to greater opposition to, and litigation concerning, oil and natural gas activities utilizing hydraulic fracturing or injection wells for waste disposal.

We face competition in the markets we serve, which could materially and adversely affect our operating results.

We actively compete with many companies producing similar products. Depending on the particular product and application, we experience competition based on a number of factors, including price, quality, performance and availability. We compete against many companies, including divisions of larger companies with greater financial resources than we possess. As a result, these competitors may be both domestically and internationally better able to withstand a change in conditions within the markets in which we compete and throughout the global economy as a whole.

In addition, our ability to compete effectively depends on how successfully we anticipate and respond to various competitive factors, including new competitors entering our markets, new products and services that may be introduced by competitors, changes in customer preferences, pricing pressures and new government regulations. If we are unable to anticipate our competitors’ development of new products and services, identify customer needs and preferences on a timely basis, or successfully introduce new products and services or modify existing products and service offerings in response to such competitive factors, we could lose customers to competitors. If we cannot compete successfully, our sales and operating results could be materially and adversely affected.

Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.

Our primary raw materials, directly and indirectly, are cast iron, aluminum and steel. We also purchase a large number of motors and, therefore, also have exposure to changes in the price of copper, which is a primary component of motors. We have long-term contracts with only a few suppliers of key components. Consequently, we are vulnerable to fluctuations in prices of such raw materials. Factors such as supply and demand, freight costs and transportation availability, inventory levels of brokers and dealers, the level of imports and general economic conditions may affect the price of raw materials. In addition, we use single sources of supply for certain iron castings, motors and other select engineered components that are critical in the manufacturing of our products. From time to time in recent years, we have experienced disruptions to our supply deliveries for raw materials and component parts and may experience further supply disruptions. Any such disruption could have a material adverse effect on our ability to timely meet our commitments to customers and, therefore, our operating results.

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Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.

We derive revenue from certain key customers, in particular with respect to our oilfield service products and services. The loss or reduction of significant contracts with any of these key customers could result in a material decrease of our future profitability and cash flows. In addition, the consolidation or vertical integration of key customers may result in the loss of certain customer contracts or impact demand or competition for our products. Any changes in such customers’ purchasing practices, or decline in such customers’ financial condition, may have a material adverse impact on our business, results of operations and financial condition. Some of our customers are significantly larger than we are, have greater financial and other resources and also have the ability to purchase products from our competitors. As a result of their size and position in the marketplace, some of our customers have significant purchasing leverage and could cause us to materially reduce the price of our products, which could have a material adverse effect on our revenue and profitability. In addition, in the petroleum product market, lost sales may be difficult to replace due to the relative concentration of the customer base. We are unable to predict what effect consolidation in our customers’ industries may have on prices, capital spending by customers, selling strategies, competitive position, our ability to retain customers or our ability to negotiate favorable agreements with customers.

The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.

We sell a significant portion of our products through independent distributors and sales representatives. We rely in large part on the orderly operation of this distribution network, which depends on adherence to shipping schedules and effective management. We conduct all of our shipping through independent third parties. Although we believe that our receiving, shipping and distribution process is efficient and well-positioned to support our operations and strategic plans, we cannot provide assurance that we have anticipated all issues or that events beyond our control, such as natural disasters or other catastrophic events, labor disagreements, acquisition of distributors by a competitor, consolidation within our distributor network or shipping problems, will not disrupt our distribution network. If complications arise within a segment of our distribution network, the remaining network may not be able to support the resulting additional distribution demands. Any of these disruptions or complications could negatively impact our revenues and costs.

Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.

We continually seek ways to simplify or improve processes, eliminate excess capacity and reduce costs in all areas of our operations, which from time to time includes restructuring activities. We have implemented significant restructuring activities across our global manufacturing, sales and distribution footprint, which include workforce reductions and facility consolidations. From 2014 to 2016, we incurred restructuring charges of approximately $43.5 million across our segments in connection with these initiatives. Costs of future initiatives may be material and the savings associated with them are subject to a variety of risks, including our inability to effectively eliminate duplicative back office overhead and overlapping sales personnel, rationalize manufacturing capacity, synchronize information technology systems, consolidate warehousing and distribution facilities and shift production to more economical facilities. As a result, the contemplated costs to effect these initiatives may materially exceed estimates. The initiatives we are contemplating may require consultation with various employees, labor representatives or regulators, and such consultations may influence the timing, costs and extent of expected savings and may result in the loss of skilled employees in connection with the initiatives.

Although we have considered the impact of local regulations, negotiations with employee representatives and the related costs associated with our restructuring activities, factors beyond the control of management may affect the timing of these projects and therefore affect when savings will be achieved under the plans. There can be no assurance that we will be able to successfully implement these cost savings initiatives in the time frames contemplated (or at all) or that we will realize the projected benefits of these and other restructuring and cost savings initiatives. If we are unable to implement our cost savings initiatives, our business may be adversely affected. Moreover, our continued implementation of cost savings initiatives may have a material adverse effect on our business, results of operations and financial condition.

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In addition, as we consolidate facilities and relocate manufacturing processes to lower-cost regions, our success will depend on our ability to continue to meet customer demand and maintain a high level of quality throughout the transition. Failure to adequately meet customer demand or maintain a high level or quality could have a material adverse effect on our business, results of operations and financial condition.

Our success depends on our executive management and other key personnel.

Our future success depends to a significant degree on the skills, experience and efforts of our executive management and other key personnel, many of whom have joined the Company since the KKR Transaction, and their ability to provide us with uninterrupted leadership and direction. The failure to retain our executive officers and other key personnel or a failure to provide adequate succession plans could have an adverse impact. The availability of highly qualified talent is limited, and the competition for talent is robust. However, we provide long-term equity incentives and certain other benefits for our executive officers which provide incentives for them to make a long-term commitment to us. Our future success will also depend on our ability to have adequate succession plans in place and to attract, retain and develop qualified personnel. A failure to efficiently replace executive management members and other key personnel and to attract, retain and develop new qualified personnel could have an adverse effect on our operations and implementation of our strategic plan.

Credit and counterparty risks could harm our business.

The financial condition of our customers could affect our ability to market our products or collect receivables. In addition, financial difficulties faced by our customers as a result of an adverse economic event or other market factors may lead to cancellation or delay of orders. Our customers may suffer financial difficulties that make them unable to pay for a product or solution when payments become due, or they may decide not to pay us, either as a matter of corporate decision-making or in response to changes in local laws and regulations. Although historically not material, we cannot be certain that, in the future, expenses or losses for uncollectible amounts will not have a material adverse effect on our revenues, earnings and cash flows.

If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.

The markets in which we operate are characterized by changing technologies and introductions of new products and services. Our ability to develop new products based on technological innovation can affect our competitive position and often requires the investment of significant resources. Difficulties or delays in research, development or production of new products and technologies, or failure to gain market acceptance of new products and technologies, may significantly reduce future revenues and materially and adversely affect our competitive position. We cannot assure you that we will have sufficient resources to continue to make the investment required to maintain or increase our market share or that our investments will be successful. If we do not compete successfully, our business, financial condition, results of operations and cash flows could be materially adversely affected.

Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.

A portion of our revenues and earnings is generated through fixed-price contracts for custom engineered products. Certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy to the satisfaction of the other party certain defects. Because substantially all of our custom engineered product contracts are at a fixed price, we face the risk that cost overruns, delays, penalties or liquidated damages may exceed, erode or eliminate our expected profit margin, or cause us to record a loss on our projects.

The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.

Our global operations subject us to regulation by U.S. federal and state laws and multiple foreign laws, regulations and policies, which could result in conflicting legal requirements. These laws and regulations are complex, change frequently, have become more stringent over time and increase our cost of doing business.

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These laws and regulations include import and export control, environmental, health and safety regulations, data privacy requirements, international labor laws and work councils and anti-corruption and bribery laws such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the U.N. Convention Against Bribery and local laws prohibiting corrupt payments to government officials.

We are subject to the risk that we, our employees, our affiliated entities, contractors, agents or their respective officers, directors, employees and agents may take actions determined to be in violation of any of these laws, for which we might be held responsible, particularly as we expand our operations geographically through organic growth and acquisitions. An actual or alleged violation could result in substantial fines, sanctions, civil or criminal penalties, debarment from government contracts, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our results of operations, financial condition or strategic objectives.

A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

As a result of the KKR Transaction, we applied the acquisition method of accounting and established a new basis of accounting on July 30, 2013. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the tangible and identifiable intangible assets acquired, liabilities assumed and any non-controlling interest. Intangible assets, including goodwill, are assigned to our reporting units based upon their fair value at the time of acquisition. In accordance with GAAP, goodwill and indefinite-lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred. In 2016, we recorded an impairment charge related to other intangible assets of $25.3 million primarily within the Industrials segment. In 2015, we recorded a goodwill impairment charge of $343.3 million within the Energy segment and recorded impairment charges related to other intangible assets of $78.1 million within our Industrials, Energy and Medical segments. In 2014, we recorded a goodwill impairment charge of $220.6 million within the Energy segment and recorded impairment charges related to other intangible assets of $14.4 million within our Industrials, Energy and Medical segments. As of March 31, 2017, the net carrying value of goodwill and other intangible assets, net represented $2,624.7 million, or 61%, of our total assets. A future impairment, if any, could have a material adverse effect to our consolidated financial position or results of operations. See Note 8 “Goodwill and Other Intangible Assets” to our audited consolidated financial statements and Note 5 “Goodwill and Other Intangible Assets” to our unaudited condensed consolidated financial statements included elsewhere in this prospectus for additional information related to impairment testing for goodwill and other intangible assets and the associated charges taken.

Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.

As of March 31, 2017, we had approximately 6,100 employees of which approximately 1,800 were located in the United States. Of those employees located outside of the United States, a significant portion are represented by works councils and labor unions, and of those employees located in the United States, approximately 200 are represented by labor unions. Although we believe that our relations with employees are satisfactory and have not experienced any material work stoppages, work stoppages have occurred, and may in the future occur, and we may not be successful in negotiating new collective bargaining agreements. In addition, negotiations with our union employees may (1) result in significant increases in our cost of labor, (2) divert management’s attention away from operating our business or (3) break down and result in the disruption of our operations. The occurrence of any of the preceding conditions could impair our ability to manufacture our products and result in increased costs and/or decreased operating results.

We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.

We have been named as a defendant in many asbestos and silica-related personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources, and typically we are one of approximately 25 or more named defendants. We believe that, given our financial reserves and anticipated insurance recoveries, the pending and potential future lawsuits are not likely to have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in

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the Adams County Case (discussed below), or other inability to collect from our historical insurers or indemnitors, could cause a different outcome. In addition, even if any damages payable by us in any individual lawsuit are not material, the aggregate damages and related defense costs could be material and could materially adversely affect our financial condition if we were to receive an adverse judgment in a number of these lawsuits. Accordingly, the resolution of pending or future lawsuits may have a material adverse effect on our consolidated financial position, results of operations or liquidity. See “Business—Legal Proceedings—Asbestos and Silica-Related Litigation.”

Acquisitions and integrating such acquisitions create certain risks and may affect our operating results.

We have acquired businesses in the past and may continue to acquire businesses or assets in the future. The acquisition and integration of businesses or assets involves a number of risks. The core risks are valuation (negotiating a fair price for the business), integration (managing the process of integrating the acquired company’s people, products, technology and other assets to extract the value and synergies projected to be realized in connection with the acquisition), regulation (obtaining necessary regulatory or other government approvals that may be necessary to complete acquisitions) and diligence (identifying undisclosed or unknown liabilities or restrictions that will be assumed in the acquisition).

In addition, acquisitions outside of the United States often involve additional or increased risks including, for example:

managing geographically separated organizations, systems and facilities;
integrating personnel with diverse business backgrounds and organizational cultures;
complying with non-U.S. regulatory requirements;
fluctuations in currency exchange rates;
enforcement of intellectual property rights in some non-U.S. countries;
difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and
general economic and political conditions.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel. The diversion of management’s attention and any delays or difficulties encountered in connection with acquisitions and the integration of an acquired company’s operations could have an adverse effect on our business, results of operations, financial condition or prospects.

A natural disaster, catastrophe or other event could result in severe property damage, which could adversely affect our operations.

Some of our operations involve risks of, among other things, property damage, which could curtail our operations. For example, disruptions in operations or damage to a manufacturing plant could reduce our ability to produce products and satisfy customer demand. If one of more of our manufacturing facilities are damaged by severe weather or any other disaster, accident, catastrophe or event, our operations could be significantly interrupted. Similar interruptions could result from damage to production or other facilities that provide supplies or other raw materials to our plants or other stoppages arising from factors beyond our control. These interruptions might involve significant damage to, among other things, property, and repairs might take from a week or less for a minor incident to many months for a major interruption.

Information systems failure may disrupt our business and result in financial loss and liability to our customers.

Our business is highly dependent on financial, accounting and other data-processing systems and other communications and information systems, including our enterprise resource planning tools. We process a large number of transactions on a daily basis and rely upon the proper functioning of computer systems. If any of these systems fail, whether caused by fire, other natural disaster, power or telecommunications failure, acts of cyber terrorism or war or otherwise, or they do not function correctly, we could suffer financial loss, business

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disruption, liability to our customers, regulatory intervention or damage to our reputation. If our systems are unable to accommodate an increasing volume of transactions, our ability to grow could be limited. Although we have backup systems, procedures and capabilities in place, they may also fail or be inadequate. Further, to the extent that we may have customer information in our databases, any unauthorized disclosure of, or access to, such information could result in claims under data protection laws and regulations. If any of these risks materialize, our reputation and our ability to conduct our business may be materially adversely affected.

The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.

Customers use some of our products in potentially hazardous applications that can cause injury or loss of life and damage to property, equipment or the environment. In addition, our products are integral to the production process for some end-users and any failure of our products could result in a suspension of operations. Although we maintain quality controls and procedures, we cannot be certain that our products will be completely free from defects. We maintain amounts and types of insurance coverage that we believe are currently adequate and consistent with normal industry practice for a company of our relative size, and we limit our liability by contract wherever possible. However, we cannot guarantee that insurance will be available or adequate to cover all liabilities incurred. We also may not be able to maintain insurance in the future at levels we believe are necessary and at rates we consider reasonable. We may be named as a defendant in product liability or other lawsuits asserting potentially large claims if an accident occurs at a location where our equipment and services have been or are being used.

Environmental compliance costs and liabilities could adversely affect our financial condition.

Our operations and properties are subject to increasingly stringent domestic and foreign laws and regulations relating to environmental protection, including laws and regulations governing air emissions, water discharges, waste management and workplace safety. Under such laws and regulations, we can be subject to substantial fines and sanctions for violations and be required to install costly pollution control equipment or put into effect operational changes to limit pollution emissions or decrease the likelihood of accidental hazardous substance releases.

We use and generate hazardous substances and waste in our manufacturing operations. In addition, many of our current and former properties are, or have been, used for industrial purposes. We have been identified as a potentially responsible party with respect to several sites designated for cleanup under U.S. federal “Superfund” or similar state laws that may impose joint and several liability for cleanup of certain waste sites and for related natural resource damages. An accrued liability on our balance sheet reflects costs that are probable and estimable for our projected financial obligations relating to these matters. If we have underestimated our remaining financial obligations, we may face greater exposure that could have an adverse effect on our financial condition, results of operations or liquidity.

We have experienced, and expect to continue to experience, operating costs to comply with environmental laws and regulations. In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new cleanup requirements could require us to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, financial condition, results of operations or liquidity.

Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.

Our success depends in part on the creation, maintenance and protection of our proprietary technology and intellectual property rights. We rely on a combination of patents, trademarks, trade secrets, copyrights, confidentiality provisions, contractual restrictions and licensing arrangements to establish and protect our proprietary rights. Our nondisclosure agreements and confidentiality agreements may not effectively prevent disclosure of our proprietary information, technologies and processes, and may not provide an adequate remedy in the event of breach of such agreements or unauthorized disclosure of such information, and if a competitor lawfully obtains or independently develops our trade secrets, we would have no right to prevent such competitor from using such technology or information to compete with us, either of which could harm our competitive

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position. Our applications for patent and trademark protection may not be granted, or the claims or scope of such issued patents or registered trademarks may not be sufficiently broad to protect our products. In addition, effective patent, copyright, trademark and trade secret protection may be unavailable or limited for some of our trademarks and patents in some foreign countries. We may be required to spend significant resources to monitor and police our intellectual property rights, and we cannot guarantee that such efforts will be successful in preventing infringement or misappropriation. If we fail to successfully enforce these intellectual property rights, our competitive position could suffer, which could harm our operating results.

Although we make a significant effort to avoid infringing known proprietary rights of third parties, the steps we take to prevent misappropriation, infringement or other violation of the intellectual property of others may not be successful and from time to time we may receive notice that a third party believes that our products may be infringing certain patents, trademarks or other proprietary rights of such third party. Responding to and defending such claims, regardless of their merit, can be costly and time-consuming, can divert management’s attention and other resources, and we may not prevail. Depending on the resolution of such claims, we may be barred from using a specific technology or other rights, may be required to redesign or re-engineer a product which may require significant resources, may be required to enter into licensing arrangements from the third party claiming infringement (which may not be available on commercially reasonable terms, or at all), or may become liable for significant damages.

If any of the foregoing occurs, our ability to compete could be affected or our business, financial condition and results of operations may be materially adversely affected.

We face risks associated with our pension and other postretirement benefit obligations.

We have both funded and unfunded pension and other postretirement benefit plans worldwide. As of December 31, 2016, our projected benefit obligations under our pension and other postretirement benefit plans exceeded the fair value of plan assets by an aggregate of approximately $124.4 million (“unfunded status”), compared to $115.5 million as of December 31, 2015. Estimates for the amount and timing of the future funding obligations of these benefit plans are based on various assumptions. These assumptions include discount rates, rates of compensation increases, expected long-term rates of return on plan assets and expected healthcare cost trend rates. If our assumptions prove incorrect, our funding obligations may increase, which may have a material adverse effect on our financial results.

We have invested the plan assets of our funded benefit plans in various equity and debt securities. A deterioration in the value of plan assets could cause the unfunded status of these benefit plans to increase, thereby increasing our obligation to make additional contributions to these plans. An obligation to make contributions to our benefit plans could reduce the cash available for working capital and other corporate uses, and may have an adverse impact on our operations, financial condition and liquidity.

Risks Related to Our Indebtedness

Our substantial indebtedness could have important adverse consequences and adversely affect our financial condition.

We have a significant amount of indebtedness. As of March 31, 2017, we had total indebtedness of $2,781.6 million, and as adjusted for this offering and the use of net proceeds therefrom, we would have had total indebtedness of $2,064.2 million, and we had availability under the Revolving Credit Facility (as defined below) and the Receivables Financing Agreement (as defined below) of $342.8 million and $52.3 million, respectively. For a complete description of the Company’s credit facilities and definitions of capitalized terms used in this section, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”

Our high level of debt could have important consequences, including: making it more difficult for us to satisfy our obligations with respect to our debt; limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions, or other general corporate requirements; requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions and other general corporate purposes; increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; exposing us to the risk of increased interest rates as

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certain of our borrowings, including borrowings under the Senior Secured Credit Facilities (as defined below), are at variable rates of interest; limiting our flexibility in planning for and reacting to changes in the industries in which we compete; placing us at a disadvantage compared to other, less leveraged competitors; increasing our cost of borrowing; and hampering our ability to execute on our growth strategy.

We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on, or refinance, our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control (as well as and including those factors discussed under “—Risks Related to Our Business” above). We may be unable to maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flow and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our indebtedness. We may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.

If we cannot make scheduled payments on our debt, we will be in default and the lenders under the Revolving Credit Facility could terminate their commitments to loan money, and our secured lenders (including the lenders under the Senior Secured Credit Facilities) could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.

Despite our level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt, including off-balance sheet financing, contractual obligations and general and commercial liabilities. This could further exacerbate the risks to our financial condition described above.

We and our subsidiaries may be able to incur significant additional indebtedness in the future, including off-balance sheet financings, contractual obligations and general and commercial liabilities. Although the credit agreement governing the Senior Secured Credit Facilities and the indenture governing the Senior Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. In addition, we can increase the borrowing availability under the Senior Secured Credit Facilities by up to $250 million in the form of additional commitments under the Revolving Credit Facility and/or incremental term loans plus an additional amount so long as we do not exceed a specified senior secured leverage ratio. We also can incur additional secured indebtedness under the Term Loan Facilities (as defined below) if certain specified conditions are met under the credit agreement governing the Term Loan Facilities. If new debt is added to our current debt levels, the related risks that we now face could intensify.

The terms of the credit agreement governing the Senior Secured Credit Facilities and the indenture governing the Senior Notes may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

The credit agreement governing the Senior Secured Credit Facilities and the indenture governing the Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to: incur additional indebtedness and guarantee indebtedness; pay dividends, make other distributions in respect of, or repurchase or redeem capital stock; prepay, redeem or repurchase certain debt; make loans, investments and other restricted payments; sell or otherwise dispose of assets; incur liens; enter into transactions with affiliates; enter into agreements restricting our subsidiaries’ ability to pay dividends; consolidate, merge or sell all or substantially all of our assets; make needed capital expenditures; make strategic acquisitions, investments or enter into joint ventures; plan for or react to market conditions or otherwise execute our business strategies; and engage in business activities, including future opportunities, that may be in our interest.

A breach of the covenants under the credit agreement governing the Senior Secured Credit Facilities or the indenture governing the Senior Notes could result in an event of default under the applicable indebtedness. Such

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a default may allow the creditors to accelerate the related debt principal and/or related interest payments and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreement governing our Senior Secured Credit Facilities would permit the lenders under our Revolving Credit Facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our Senior Secured Credit Facilities, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders or noteholders accelerate the repayment of our borrowings and/or interest, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our Senior Secured Credit Facilities and our Receivables Financing Agreement are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.

We have entered into pay-fixed interest rate swaps instruments to limit our exposure to changes in variable interest rates. Such instruments will result in economic losses should interest rates not rise above the pay-fixed interest rate in the derivative contracts. We will be exposed to credit-related losses which could impact the results of operations in the event of fluctuations in the fair value of the interest rate swaps due to a change in the credit worthiness or non-performance by the counterparties to the interest rate swaps. See Note 16 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements and Note 10 “Hedging Activities and Fair Value Measurements” to our unaudited condensed consolidated financial statements included elsewhere in this prospectus.

If the financial institutions that are part of the syndicate of our Revolving Credit Facility fail to extend credit under our facility or reduce the borrowing base under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.

We have access to capital through our Revolving Credit Facility, which is part of our Senior Secured Credit Facilities. Each financial institution which is part of the syndicate for our Revolving Credit Facility is responsible on a several, but not joint, basis for providing a portion of the loans to be made under our facility. If any participant or group of participants with a significant portion of the commitments in our Revolving Credit Facility fails to satisfy its or their respective obligations to extend credit under the facility and we are unable to find a replacement for such participant or participants on a timely basis (if at all), our liquidity may be adversely affected.

Risks Related to Our Common Stock and this Offering

Our Sponsor will continue to have significant influence over us after this offering, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.

Upon the completion of this offering, affiliates of our Sponsor will own approximately 77.2% of the outstanding shares of our common stock (or 74.7% if the underwriters exercise their option to purchase additional shares in full). As long as affiliates of our Sponsor own or control a significant amount of our outstanding voting power, our Sponsor and its affiliates have the ability to exercise substantial control over all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including:

the election and removal of directors and the size of our board of directors;
any amendment of our articles of incorporation or bylaws; or
the approval of mergers and other significant corporate transactions, including a sale of substantially all of our assets.

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Moreover, ownership of our shares by affiliates of our Sponsor may also adversely affect the trading price for our common stock to the extent investors perceive disadvantages in owning shares of a company with a controlling shareholder. In addition, our Sponsor is in the business of making investments in companies and may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers. Our Sponsor may acquire or seek to acquire assets that we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue, and as a result, the interests of our Sponsor may not coincide with the interests of our other stockholders.

Upon the listing of our shares on the NYSE, we will be a “controlled company” within the meaning of the NYSE rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After completion of this offering, affiliates of our Sponsor will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that, within one year of the date of the listing of our common stock:

we have a board of directors that is composed of a majority of “independent directors,” as defined under the rules of such exchange;
we have a compensation committee that is composed entirely of independent directors; and
director nominations be made, or recommended to the full board, by our independent directors or by a nominating and corporate governance committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

After we cease to be a “controlled company,” we will be required to comply with the above referenced requirements within one year.

Following this offering, we intend to utilize certain of these exemptions. As a result, we will not have a majority of independent directors on our board of directors or our compensation committee. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Provisions of our corporate governance documents and Delaware law could make any change in our board of directors or in control of our Company more difficult.

Our amended and restated certificate of incorporation and our amended and restated bylaws, each of which will be effective immediately prior to the closing of this offering, and Delaware law contain provisions, such as provisions authorizing, without a vote of stockholders, the issuance of one or more series of preferred stock, that could make it difficult or expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management and board of directors even if such a transaction would be beneficial to our stockholders. We will also have a staggered board of directors that could make it more difficult for stockholders to change the composition of our board of directors in any one year. These anti-takeover provisions could substantially impede the ability of public stockholders to change our management or board of directors, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. See “Description of Capital Stock.”

If you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of your investment.

Prior stockholders have paid substantially less per share for our common stock than the price in this offering. The initial public offering price of our common stock is substantially higher than the net tangible book deficit per share of outstanding common stock prior to completion of the offering. Based on our net tangible book deficit as of March 31, 2017 and upon the issuance and sale of shares of common stock by us at an initial

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public offering price of $20.00 per share, if you purchase our common stock in this offering, you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $28.65 per share in net tangible book value. Dilution is the amount by which the offering price paid by purchasers of our common stock in this offering will exceed the pro forma net tangible book value per share of our common stock upon completion of this offering. If the underwriters exercise their option to purchase additional shares, or if outstanding options to purchase our common stock are exercised, you will experience additional dilution. You may experience additional dilution upon the exercise of stock options or SARs, the settlement of DSUs or future equity issuances granted to our employees, executive officers and directors under our 2013 Stock Incentive Plan, 2017 Stock Incentive Plan or other omnibus incentive plans. See “Dilution.”

An active, liquid trading market for our common stock may not develop, which may limit your ability to sell your shares.

Prior to this offering, there has been no public market for our common stock. Although we intend to apply to list our common stock on the NYSE under the symbol “GDI,” an active trading market for our shares may never develop or be sustained following this offering. The initial public offering price will be determined by negotiations between us and the underwriters and may not be indicative of market prices of our common stock that will prevail in the open market after the offering. A public trading market having the desirable characteristics of depth, liquidity and orderliness depends upon the existence of willing buyers and sellers at any given time, such existence being dependent upon the individual decisions of buyers and sellers over which neither we nor any market maker has control. The failure of an active and liquid trading market to develop and continue would likely have a material adverse effect on the value of our common stock. The market price of our common stock may decline below the initial public offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

Our operating results and share price may be volatile, and the market price of our common stock after this offering may drop below the price you pay.

Our quarterly operating results are likely to fluctuate in the future as a publicly traded company. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. We and the underwriters will negotiate to determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price, or at all. Our operating results and the trading price of our shares may fluctuate in response to various factors, including:

market conditions in the broader stock market;
actual or anticipated fluctuations in our quarterly financial and operating results;
introduction of new products or services by us or our competitors;
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common stock or the stock of other companies in our industries;
strategic actions by us, our customers or our competitors, such as acquisitions or restructurings;
changes in accounting standards, policies, guidance, interpretations or principles;
issuance of new or changed securities analysts’ reports or recommendations or termination of coverage of our common stock by securities analysts;
guidance, if any, that we provide to the public, any changes in this guidance, or our failure to meet this guidance;
sales, or anticipated sales, of large blocks of our stock;

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the granting or exercise of employee stock options;
volume of trading in our common stock;
additions or departures of key personnel;
regulatory or political developments;
litigation and governmental investigations;
changing economic conditions;
defaults on our indebtedness; and
exchange rate fluctuations.

These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our shares to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. After this offering, we will have outstanding 189,732,248 shares of common stock based on the number of shares outstanding as of March 31, 2017. This includes 41,300,000 shares that we are selling in this offering, which may be resold in the public market immediately, and assumes no exercises of outstanding options or SARs or settlement of DSUs. Substantially all of the shares that are not being sold in this offering will be subject to a 180-day lock-up period provided under agreements executed in connection with this offering. Under certain circumstances, these shares will, however, be able to be resold after the expiration of the lock-up agreements and other restrictions on transfer as described in the “Shares Eligible for Future Sale” section of this prospectus. Affiliates of our Sponsor have demand registration rights and they and certain of our stockholders have “piggyback” registration rights with respect to future registered offerings of our common stock. See “Certain Relationships and Related Person Transactions” for more detail. Affiliates of our Sponsor and other stockholders, who collectively are expected to own 78.2% of our common stock after this offering, may sell shares of our common stock after the expiration of the 180-day lock-up period. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the “Underwriting (Conflicts of Interest)” section of this prospectus. As restrictions on resale end, the market price of our stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

Because we have no current plans to pay cash dividends on our common stock following this offering, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We do not anticipate paying any cash dividends on our common stock following this offering. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions contained in current or future financing instruments and other factors that our board of directors deem relevant. Additionally, our ability to pay dividends is limited by restrictions on the ability of our operating subsidiaries to make distributions, including restrictions under the terms of the agreements governing our debt. Therefore, any return on investment in our common stock is solely dependent upon the appreciation of the price of our common stock on the open market, which may not occur. See “Dividend Policy” for more detail.

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Because a significant portion of our operations is conducted through our subsidiaries, we are largely dependent on our receipt of distributions or other payments from our subsidiaries for cash to fund all of our operations and expenses, including to make future dividend payments, if any.

A significant portion of our operations is conducted through our subsidiaries. As a result, our ability to service our debt or to make future dividend payments or other distributions, if any, is largely dependent on the earnings of our subsidiaries and the payment of those earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us. Payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings and other business considerations and may be subject to statutory or contractual restrictions. We do not currently expect to declare or pay dividends and other distributions on our common stock for the foreseeable future; however, to the extent that we determine in the future to pay dividends or other distributions on our common stock, the credit agreement governing our Senior Secured Credit Facilities and the indenture governing the Senior Notes significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. Further, there may be significant tax and other legal restrictions on the ability of non-U.S. subsidiaries or associates to remit money to us.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline.

The trading market for our shares will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline.

Our internal control over financial reporting does not currently meet the standards required by Section 404 of the Sarbanes Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes Oxley Act could have a material adverse effect on our business and share price.

As a privately-held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) (“Section 404”) of the Sarbanes Oxley Act of 2002 (the “Sarbanes Oxley Act”). We anticipate being required to meet these standards in the course of preparing our financial statements as of and for the year ended December 31, 2018, and our management will be required to report on the effectiveness of our internal control over financial reporting for such year. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation in connection with the attestation provided by our independent registered public accounting firm. In the event we are unable to receive a favorable attestation report in a timely manner, the market price of our common stock could decline and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory agencies, which could require additional financial and management resources. Additionally, we will be unable to issue securities in the public markets through the use of a shelf registration statement if we are not in compliance with Section 404. Furthermore, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and share price and could limit our ability to report our financial results accurately and timely.

We will incur significant costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives.

As a privately-held company, we were not required to comply with certain corporate governance and financial reporting practices and policies required of a publicly traded company. As a publicly traded company, we will incur significant legal, accounting and other expenses that we were not required to incur in the recent

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past. In addition, compliance with new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated and to be promulgated thereunder, as well as under the Sarbanes Oxley Act, and the rules and regulations of the SEC, and the NYSE, will increase our legal and financial compliance costs and make some activities more difficult, time-consuming or costly. For example, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will require us, among other things, to file annual, quarterly and current reports with respect to our business and operating results. We also expect that being a public company and being subject to new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors may therefore strain our resources, divert management’s attention and affect our ability to attract and retain qualified members of our board of directors.

Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a publicly traded company. However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.

Our amended and restated certificate of incorporation provides that unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director or officer of our Company to the Company or the Company’s stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the General Corporation Law of the State of Delaware (the “DGCL”) or our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of our Company shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. The choice of forum provision in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or any of our directors, officers, other employees, agents or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial position, results of operations or cash flows.

Our amended and restated certificate of incorporation includes provisions limiting the personal liabilityof our directors for breaches of fiduciary duty under the DGCL.

Our amended and restated certificate of incorporation contains provisions permitted under the action asserting a claim arising under DGCL relating to the liability of directors. These provisions eliminate a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, subject to certain circumstances

The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL. These provisions, however, should not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. These provisions do not alter a director’s liability under federal securities laws. The inclusion of this provision in our amended and restated certificate of incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters we discuss in this prospectus may constitute forward-looking statements. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” “anticipates,” “could,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “potential,” “continue” or similar expressions which concern our strategy, plans, projections or intentions. Examples of forward-looking statements include, but are not limited to, all statements we make relating to revenue, Adjusted EBITDA, Free Cash Flow, earnings, margins, growth rates and other financial results for future periods, as well as business strategy, prospective products, capital expenditures, research and development costs and future investments, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products. By their nature, forward-looking statements: speak only as of the date they are made; are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. All forward-looking statements in this prospectus apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this prospectus. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this prospectus. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

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USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately $780.6 million from the sale of 41,300,000 shares of our common stock in this offering, after deducting the underwriting discounts and commissions. If the underwriters exercise in full their option to purchase additional shares, the net proceeds to us will be approximately $897.7 million.

We intend to use the net proceeds from this offering to redeem all $575.0 million aggregate principal amount of our Senior Notes, including applicable redemption premiums, to repay $159.6 million of borrowings under our Dollar Term Loan Facility and to pay certain expenses related to this offering. The Senior Notes mature on August 15, 2021 and bear interest at a rate of 6.875% per annum. Borrowings under the Dollar Term Loan Facility mature on April 30, 2020 and as of March 31, 2017 bore interest at a rate of 4.56% per annum. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”

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DIVIDEND POLICY

We do not intend to pay cash dividends on our common stock in the foreseeable future. We may, in the future, decide to pay dividends on our common stock. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions contained in current or future financing instruments and other factors that our board of directors deem relevant. Additionally, our ability to pay dividends is limited by restrictions on the ability of our operating subsidiaries to make distributions, including restrictions under the terms of the agreements governing our debt. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness” for a description of the restrictions on our ability to pay dividends. We did not declare or pay dividends to the holders of our common stock in the years ended December 31, 2015 and 2016 or in the three months ended March 31, 2017.

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DILUTION

If you invest in our common stock in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the adjusted net tangible book value per share of our common stock after this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the shares of common stock held by existing stockholders.

Our net tangible book deficit as of March 31, 2017 was approximately $(2,341) million, or $(15.77) per share of our common stock. We calculate net tangible book value per share by taking the amount of our total tangible assets, reduced by the amount of our total liabilities, and then dividing that amount by the total number of shares of common stock outstanding.

After giving effect to our sale of the shares in this offering and after deducting estimated underwriting discounts and commissions, our adjusted net tangible book deficit on March 31, 2017 would have been approximately $(1,641.9) million, or $(8.65) per share of our common stock. This amount represents an immediate increase in net tangible book value (or a decrease in net tangible book deficit) of $7.12 per share to existing stockholders and an immediate and substantial dilution in net tangible book value of $(28.65) per share to new investors purchasing shares in this offering at the initial public offering price.

The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share
 
 
 
$
20.00
 
Net tangible book value (deficit) per share as of March 31, 2017
$
(15.77
)
 
 
 
Increase in tangible book value per share attributable to new investors
$
7.12
 
 
 
 
Adjusted net tangible book value (deficit) per share after this offering
 
 
 
 
(8.65
)
Dilution per share to new investors
 
 
 
$
(28.65
)

Dilution is determined by subtracting adjusted net tangible book value per share of common stock after the offering from the initial public offering price per share of common stock.

If the underwriters exercise in full their option to purchase additional shares, the adjusted net tangible book deficit per share after giving effect to the offering would be $(7.80) per share. This represents an increase in adjusted net tangible book value (or a decrease in net tangible book value deficit) of $7.98 per share to the existing stockholders and results in dilution in as adjusted net tangible book value of $(27.80) per share to new investors.

The following table summarizes, as of March 31, 2017, the differences between the number of shares purchased from us, the total consideration paid to us, and the average price per share paid by existing stockholders and by new investors. As the table shows, new investor purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders paid. The table below is based on an initial public offering price of $20.00 per share for shares purchased in this offering and excludes underwriting discounts and commissions and estimated offering expenses payable by us:

 
Shares Purchased
Total Consideration
Average/
Share
 
Number
%
Amount
%
Existing stockholders
 
148,432,248
 
 
78.2
%
$
1,226.3
 
 
59.8
%
$
8.26
 
New investors
 
41,300,000
 
 
21.8
%
 
826.0
 
 
40.2
%
 
20.00
 
Total
 
189,732,248
 
 
100
%
$
2,052.3
 
 
100
%
$
10.82
 

If the underwriters were to fully exercise the underwriters’ option to purchase 6,195,000 additional shares of our common stock, the percentage of shares of our common stock held by existing stockholders would be 75.8% and the percentage of shares of our common stock held by new investors would be 24.2%.

Additionally, the number of shares of our common stock to be outstanding after this offering is based on the number of shares of our common stock outstanding as of March 31, 2017 and excludes: 11,629,881 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2017 at a weighted average exercise price of $8.90 per share; 932,380 shares of common stock that may be issued upon the exercise of SARs outstanding as of March 31, 2017 at a weighted average strike price of $8.60 per share, although we

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currently expect all SARs to be settled in cash; 737,769 shares of common stock issuable upon the exercise of options that are expected to be granted prior to the consummation of this offering, with an exercise price per share equal to the initial public offering price; and approximately 5,515,000 shares of common stock issuable upon the settlement of DSUs to be granted in connection with this offering, in each case granted under our 2013 Stock Incentive Plan; and 8,550,000 shares of common stock reserved for issuance under our 2017 Stock Incentive Plan.

To the extent any of these outstanding equity awards vest and, if applicable, are exercised, there will be further dilution to new investors. To the extent all of such equity awards had been outstanding and had vested and, if applicable, had been exercised, as of March 31, 2017, the as adjusted net tangible book deficit per share after this offering would be approximately $(7.34), and total dilution per share to new investors would be $(27.34).

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2017:

on an actual basis; and
on an as adjusted basis to give effect to (1) the sale of 41,300,000 shares of our common stock in this offering, (2) the application of the estimated proceeds from the offering, at the initial public offering price of $20.00 per share after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as described in “Use of Proceeds” and (3) the payment of the termination fee to our Sponsor as described in “Certain Relationships and Related Party Transactions—Monitoring Agreement.”

You should read this table in conjunction with the information contained in “Use of Proceeds,” “Selected Historical Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the consolidated financial statements and the notes thereto included elsewhere in this prospectus.

 
As of March 31, 2017
(in millions, except shares)
Actual
As Adjusted
Cash and cash equivalents(1)
$
225.6
 
$
207.4
 
Debt:
 
 
 
 
 
 
Senior Secured Credit Facility(2):
 
 
 
 
 
 
Revolving Credit Facility(3)
$
 
$
 
Dollar Term Loan Facility(4)
 
1,828.8
 
 
1,669.2
 
Euro Term Loan Facility(5)
 
409.8
 
 
409.8
 
Receivables Financing Agreement(6)
 
 
 
 
Senior Notes
 
575.0
 
 
 
Second Mortgages(7)
 
1.9
 
 
1.9
 
Capitalized leases
 
21.4
 
 
21.4
 
Unamortized debt issuance costs(8)
 
(55.3
)
 
(38.1
)
Total debt
$
2,781.6
 
$
2,064.2
 
Stockholders’ equity:
 
 
 
 
 
 
Common stock, $0.01 par value (1,000,000,000 shares authorized and 150,552,360 shares issued, actual; 1,000,000,000 shares authorized and 191,852,360 shares issued, as adjusted)
$
1.5
 
$
1.9
 
Capital in excess of par value
 
1,224.8
 
 
2,001.1
 
Accumulated other comprehensive loss
 
(317.4
)
 
(317.4
)
Treasury stock at cost; 2,120,112 shares, actual and as adjusted
 
(22.0
)
 
(22.0
)
Accumulated deficit(9)
 
(603.2
)
 
(680.6
)
Noncontrolling interests
 
 
 
 
Total stockholders’ equity
$
283.7
 
$
983.0
 
Total capitalization
$
3,065.3
 
$
3,047.2
 

(1)Reflects the use of cash on hand to pay accrued and unpaid interest in respect of the Senior Notes being redeemed, borrowings under the Dollar Term Loan Facility being repaid and expenses related to this offering.
(2)The Senior Secured Credit Facility provides senior secured financing in the equivalent of approximately $2,785.0 million, initially consisting of: (i) a senior secured term loan facility (the “Dollar Term Loan Facility”) in an aggregate principal amount of $1,900.0 million; (ii) a senior secured term loan facility (the “Euro Term Loan Facility” and, together with the Dollar Term Loan Facility, the “Term Loan Facilities”) in an aggregate principal amount of €400.0 million; and (iii) a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $400.0 million available to be drawn in U.S. dollars, Euros, British Pound and other acceptable foreign currencies, subject to certain sublimits for the foreign currencies and subject to reductions in the aggregate principal amount. See footnote (3) below.
(3)The Revolving Credit Facility provides for aggregate borrowings of up to $360.0 million through July 30, 2018, after which the aggregate borrowing capacity decreases to $269.9 million, due to the maturity of the commitments under the Revolving Credit Facility provided by lenders that elected not to extend the maturity date of their commitments to July 30, 2020. As of March 31, 2017, the Company had no borrowings and $17.2 million of letters of credit outstanding under the Revolving Credit Facility and there was $342.8 million of availability under the Revolving Credit Facility.

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(4)Net of $4.7 million of unamortized original issue discounts.
(5)Net of $1.3 million of unamortized original issue discounts.
(6)The receivables financing agreement (the “Receivables Financing Agreement”) provides for aggregate borrowings of up to $75.0 million governed by a borrowing base. As of March 31, 2017, the Company had no borrowings and $22.7 million of letters of credit outstanding under the Receivables Financing Agreement and there was $52.3 million of availability under the Receivables Financing Agreement.
(7)Represents a fixed-rate commercial loan secured by the Company’s facility in Neustadt, Germany.
(8)As adjusted column gives effect to the write-off of approximately $17.2 million of unamortized debt issuance costs in connection with the repayment of $734.6 million of our existing indebtedness with net proceeds from this offering. See “Use of Proceeds.”
(9)Accumulated deficit as adjusted includes amortization of debt issuance costs associated with the debt paid off with proceeds of the offering and expenses associated with paying down the debt of $57.9 million, the payment of the termination fee to our Sponsor and expenses associated with the offering of $3.2 million. Does not reflect approximately $165 million of non-cash stock-based compensation expense that we expect to incur during the quarter in which this offering is completed related to certain historical equity awards and the grant of DSUs and stock options in connection with this offering. See “Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of our Results of Operations—Stock-based Compensation Expense.”

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

Set forth below is our selected historical consolidated financial data as of the dates and for the periods indicated. The selected historical consolidated financial data as of December 31, 2016 and 2015 and for the fiscal years ended December 31, 2016, 2015 and 2014 have been derived from our audited consolidated financial statements and related notes thereto included elsewhere in this prospectus. The selected historical consolidated financial data as of December 31, 2014 and for the period from July 30, 2013 through December 31, 2013 have been derived from our consolidated financial statements and related notes thereto not included in this prospectus. The selected historical consolidated financial data as of July 29, 2013 and December 31, 2012, for the period from January 1, 2013 through July 29, 2013 and the year ended December 31, 2012 have been derived from the consolidated financial statements and related notes thereto of Gardner Denver, Inc., our “accounting predecessor,” not included in this prospectus. We have derived the selected historical consolidated financial data as of March 31, 2017 and for each of the three months ended March 31, 2017 and March 31, 2016 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus, which have been prepared on the same basis as our audited consolidated financial statements. Share and per share data in the table below has been retroactively adjusted to give effect to the 1.6331-for-one stock split, which occurred on April 27, 2017.

Selected historical consolidated financial data are presented for two periods: Predecessor and Successor, which relate to the period preceding the KKR Transaction and the period succeeding the KKR Transaction, respectively. The Company refers to the operations of our accounting predecessor and its subsidiaries for the Predecessor period and the operations of Gardner Denver Holdings, Inc. (formerly known as Renaissance Parent Corp.) and subsidiaries for the Successor periods. The financial Successor and Predecessor financial statements are not comparable as a result of the application of acquisition accounting and changes in the Company’s capital structure resulting from the KKR Transaction.

The selected historical consolidated financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus.

 
Successor
Predecessor
(in millions)
Three months
ended
March 31,
2017
Three months
ended
March 31,
2016
Year ended
December 31,
2016
Year ended
December 31,
2015
Year ended
December 31,
2014(1)
July 30, 2013 –
December 31,
2013(1)(2)
January 1,
2013 – July 29,
2013(2)
Year ended
December 31,
2012(2)
Consolidated Statements of Operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
481.7
 
$
437.1
 
$
1,939.4
 
$
2,126.9
 
$
2,570.0
 
$
978.4
 
$
1,231.6
 
$
2,355.5
 
Cost of sales
 
307.1
 
 
278.2
 
 
1,222.7
 
 
1,347.8
 
 
1,633.2
 
 
666.5
 
 
799.5
 
 
1,525.5
 
Gross profit
 
174.6
 
 
158.9
 
 
716.7
 
 
779.1
 
 
936.8
 
 
311.9
 
 
432.1
 
 
830.0
 
Selling and administrative expenses
 
102.4
 
 
103.1
 
 
414.3
 
 
427.0
 
 
476.0
 
 
193.7
 
 
263.8
 
 
408.2
 
Amortization of intangible assets
 
27.6
 
 
29.6
 
 
124.2
 
 
115.4
 
 
113.3
 
 
111.9
 
 
9.9
 
 
20.1
 
Impairment of goodwill
 
 
 
 
 
 
 
343.3
 
 
220.6
 
 
 
 
 
 
 
Impairment of other intangible assets