Gardner Denver, Inc.
Gardner Denver, Inc.
Sales: $419.82 million (2001)
Stock Exchanges: New York
Ticker Symbol: GDI
NAIC: 333912 Air and Gas Compressor Manufacturing; 333412 Industrial and Commercial Fan and Blower Manufacturing; 333911 Pump and Pumping Equipment Manufacturing
Gardner Denver, Inc. is a manufacturer of stationary air compressors, blowers, and pumps. Roughly three-quarters of the company’s sales are derived from the sale of stationary air compressors. Stationary air compressors are used in a variety of industrial applications, including manufacturing, materials handling, and as a source of power for air tools and equipment. Gardner Denver’s blowers are used in engineered vacuum systems, wastewater aeration, and in pneumatic conveying. The company’s pumps are used in the oil and gas industry and in water jetting systems.
Gardner Denver’s lengthy involvement in the industrial equipment industry began in 1859, when the company’s founder, Robert W. Gardner, started Gardner Company. The company’s first product was derived from Gardner’s efforts to redesign an existing product, the “fly-ball” governor, which provided speed control for steam engines. Gardner’s creation found a receptive audience among oil drillers, whose rigs and hoisting mechanisms relied on steam for power. Governors provided the means for Gardner Company to establish itself as a financially viable enterprise, serving as the company’s sole source of income for its first two decades of business. Equally as important, Gardner’s revamped steam-engine governors introduced the company to the industry—oil and gas production—that would provide the bulk of its customers for more than the ensuing century-and-a-half.
Gardner Company began to take on its 20th-century characteristics through diversification. The company’s first foray beyond steam-engine governors occurred when Gardner again re-engineered an existing product. Seeking to find additional sources of income from the oil and gas industry upon which he relied, Gardner began tinkering with steam pumps. Steam pumps were originally designed to provide water for pressurized boilers, but Gardner discovered the pumps could be easily converted to mud pumps, the type of pumps used in drilling for oil and natural gas. He began making mud pumps in 1890, which added a second product line that bolstered the company’s recognition among the country’s fortune-seeking explorers and drillers. The demand for Gardner Company’s mud pumps increased exponentially roughly a decade later when a major oil strike at the Spindletop Oil Field in 1901 triggered a surge in business throughout Texas. Perhaps more important than the spike in sales realized in the months after the Spindletop discovery was Gardner Company’s third attempt at diversification, also completed at this time. Concern regarding the anticipated decline in demand for steam power prompted Gardner to develop a product line that could sustain his company in a post-steam-power era. His solution was the manufacture of vertical, high-speed air compressors. A century later, the manufacture of compressors constituted a major business area of Gardner Denver.
The adoption of the Gardner Denver name occurred nearly three decades after the company began manufacturing air compressors. By this point in the company’s development, Gardner’s son, J. Willis Gardner, was in charge of the firm. In 1927, J. Willis Gardner orchestrated the merger of his father’s company with its largest customer, Denver Rock Drill Manufacturing Company, a manufacturer of equipment for oil wells, mining, and construction. The merger greatly broadened the scope of Gardner Company’s business, creating Gardner-Denver Company. In its new guise, the company supplied equipment for oil wells, pipeline trenching, mining, dam and tunnel projects, and highway construction.
For the next half-century, Gardner-Denver developed its diversified business interests, recording steady growth as an independent company. The expertise and customer base developed by the company attracted the attention of a larger suitor, as celebrations marked the 120th anniversary of Robert Gardner’s fly-ball governor. In 1979, Cooper Industries, Inc. acquired Gardner-Denver, ending the company’s existence as an independent entity.
Founded in 1833, Cooper Industries began as a manufacturer of power and compression equipment for the natural gas industry. By the time its path crossed with Gardner-Denver, Cooper Industries was diversifying into a number of different business areas. Beginning in the 1960s, the company broadened its product lines to include automotive products, electrical power equipment, tools and hardware, and petroleum and industrial equipment. Gardner-Denver, along with other acquisitions, helped Cooper Industries establish a presence in petroleum and industrial equipment markets.
Once acquired by Cooper Industries, Gardner-Denver was split into ten unincorporated divisions, its identity subsumed by its new parent company. Of the ten divisions that previously composed Gardner-Denver, two remained pertinent to the future of the Gardner Denver name. The Gardner-Denver Air Compressor Division and the Petroleum Equipment Division, whose roots traced back to the beginning of the 20th century, formed the foundation of the new Gardner Denver that would emerge in the 1990s. In 1985, the two divisions were consolidated by Cooper Industries, forming the Gardner-Denver Industrial Machinery Division. During the next several years, the size of the division was expanded, its product lines increased by acquisitions completed by Cooper Industries. In 1987, Cooper Industries acquired the Sutorbilt and DuroFlow blower product lines, as well as a line of industrial compressors marketed under the name Joy. These assets were absorbed by the Gardner-Denver Industrial Machinery Division.
Independence in the 1990s
During the early 1990s, Cooper Industries’ corporate strategy underwent significant change. Roughly 30 years of diversification had created a multibillion-dollar conglomerate with a broad range of business interests, but, in the eyes of company executives, the economic climate of the 1990s dictated a change in philosophy. The company decided to focus on its two most profitable business segments, electrical products and tools and hardware, a decision that led to the divestiture of many of the companies Cooper Industries had acquired, the Gardner-Denver Industrial Machinery Division included. To rid itself of the division, Cooper Industries formed a wholly owned subsidiary named Gardner Denver, Inc., which absorbed the assets and liabilities of the Gardner-Denver Industrial Machinery Division, effective on the last day of 1993. Several months later, on April 15, 1994, Cooper Industries spun off Gardner Denver, Inc. as a separate, independent company.
Its ties to Cooper Industries severed, Gardner Denver began its second era of independence as a manufacturer of industrial air compressors, blowers, and pumps used in the petroleum industry. As the company moved forward as an independent entity, growth was achieved in large part through acquisitions, a strategy espoused by its leader, Ross J. Centanni. Centanni had joined Cooper Industries in 1980, as the director of its corporate planning and development group. In 1985, Centanni was named director of marketing for the Gardner Denver Industrial Machinery Division, before being appointed vice-president and general manager of the division in 1990. When the spinoff was completed Centanni was named president and chief executive officer, posts he would occupy for the remainder of the 1990s. Under his stewardship, Gardner Denver embarked on a vigorous acquisition campaign that extended the company’s product lines, added new product technology, and increased its overseas business.
Gardner Denver’s acquisition campaign began in 1996. The company acquired NORAMPTCO, Inc., which was renamed Gardner Denver Holdings Inc., and its primary operating subsidiary, Lamson Corporation. Lamson designed and manufactured centrifugal blowers and exhausters used in various industrial and wastewater applications. The acquisition enabled Gardner Denver to enter the market for centrifugal blowers, which operated at reduced noise levels mandated in select niche markets previously inaccessible to Gardner Denver. The second acquisition in 1996 was a Tulsa, Oklahoma-based oilfield pump manufacturer named TCM Investments, Inc. Aside from giving the company a physical presence in the oilfield market, the addition of TCM allowed Gardner Denver to become the sole supplier of repair parts and re-manufacturing services to some of its customers.
Our goal is to create innovative compressed air, petroleum pump, and natural gas compressor solutions that help facilitate the free flow of products from manufacturers to their respective end users in North America and around the world. We also deliver custom-designed equipment packages which often provide our customers with the competitive edge that defines the difference between moderate and superior results in the marketplace.
With acquisition targets on the horizon, Centanni reorganized Gardner Denver in 1997. He opted for a decentralized structure that, in his opinion, could better support the growth engendered by the company’s ongoing acquisition campaign. In August, the company was separated into two divisions: the Gardner Denver Blower Division and the Gardner Denver Compressor and Pump Division. The latter business segment was enriched by the company’s only acquisition of 1997, the purchase of Tampere, Finland-based Oy Tamrotor AB, a manufacturer of lubricated rotary screw compressor air ends. When Gardner Denver was spun off from Cooper Industries, international business accounted for only 15 percent of sales, derived almost entirely from the sale of pumps. Centanni wanted to increase the company’s involvement in overseas markets, and the addition of Tamrotor represented a significant move in this direction, providing Gardner Denver with a manufacturing base in Europe and access to European compressor markets. Although Tamrotor was liquidated in 1999, Gardner Denver continued to operate in Finland under the name Gardner Denver OY.
After completing only one acquisition in 1997, Gardner Denver displayed more aggressive acquisitive energy in 1998. In January, the company acquired two companies, Champion Pneumatic Machinery Company, Inc. and Geological Equipment Corporation. Princeton, Illinois-based Champion manufactured low horsepower reciprocating compressors, a new market for Gardner Denver. Geological Equipment, based in Fort Worth, Texas, manufactured and repaired pumps, providing Gardner Denver with entry into the water jetting market. The company also bolstered its presence in Europe in 1998, acquiring the Wittig Division controlled by Mannesmann Demag AG. Completed in March, the deal added to Gardner Denver’s manufacturing presence in Europe and opened distribution channels for its blower products.
By the end of 1998, Gardner Denver had achieved its fourth consecutive year of double-digit sales growth, in large part derived from its acquisition campaign. Revenues reached $385 million, 30 percent more than the total recorded the previous year, and net income increased 33 percent from 1997’s total, climbing to $36.8 million. Encouraged by these figures, Centanni, elected chairman of the board in 1998, pressed ahead with acquisitions in 1999, purchasing the $14-million-in-sales Allen-Stuart Equipment Company in April. A maker of custom packages for blower and compressor equipment, Allen-Stuart served customers in the petrochemical, power generation, oil and gas production, and refining industries. The company’s entry into the water jet market was strengthened the same month Allen-Stuart joined the fold, when Butterworth Jetting Systems, Inc., a $12 million-in-sales company based in Houston, Texas, was acquired. In October, the company accelerated its penetration of the centrifugal compressor market by acquiring $11 million-in-sales, Kentucky-based Air Relief, Inc.
The acquisition spree continued in 2000, as Gardner Denver fleshed out its capabilities in centrifugal blowers and water jetting. The company acquired Invincible Airflow Systems in January, broadening its centrifugal blower product offerings. Later in the year, Gardner Denver added to its involvement in the water jetting market by acquiring two Houston, Texas-based companies, Jetting Systems and Accessories and CRS Power Flow, Inc., which supplied aftermarket parts and accessories.
In 2001, Gardner Denver expanded abroad and domestically. The company established a presence in England by acquiring the Hamworthy Belliss & Morcom compressor business controlled by Powell Duffryn Ltd. With nearly $60 million in annual revenue, the Gloucester-based compressor operation was expected to strengthen Gardner Denver’s distribution and service networks in Europe, North America, and South America. At home, the company recorded another sizable increase to its revenue volume by acquiring $41 million-in-sales Hoffman Air and Filtration Systems. Based in Syracuse, New York, Hoffman supplied centrifugal blowers and vacuum systems for wastewater treatment and industrial applications.
By the end of 2001, a five-year acquisition campaign had delivered substantial increases to the scope and size of Gardner Denver’s business, promising a continuation of the campaign in the future. The 14 acquisitions completed between 1996 and 2001 drove sales up to $420 million and shaped the company into a more internationally oriented enterprise. By the beginning of the 21st century, roughly 30 percent of the company’s sales came from business abroad, double the percentage recorded when it was spun off from Cooper Industries. As Gardner Denver entered the new millennium, further acquisitions were anticipated.
Air Relief, Inc.; Allen-Stuart Equipment Company; CRS Power Flow; Hamworthy Belliss & Morcom; Hoffman Air and Filtration Systems; Invincible Air Flow Systems; Jetting Systems & Accessories; Lamson Corporation; TCM Investments, Inc.; Wittig Division.
Compressor Division; Blower Division; Pump Division.
- Robert W. Gardner founds the company.
- Gardner Company begins manufacturing mud pumps.
- A merger with Denver Rock Drill Manufacturing Company creates Gardner-Denver Company.
- Cooper Industries acquires the company.
- Gardner-Denver Industrial Machinery Division is formed.
- Gardner Denver, Inc. is spun off by Cooper Industries.
- A domestic and international acquisition campaign begins.
“Gardner Denver Forms New Pump Division,” Modern Bulk Transporter, October 1, 2001, p. 24.
“Gardner Denver, Inc.,” Industrial Distribution, November 2001, p. 14.
“Invensys Has Sold Its Hoffman Business to Gardner Denver Inc. for $45m Cash,” Engineer, September 7, 2001, p. 7.
—Jeffrey L. Covell