The Zacks Analyst Blog Highlights: Kohlberg Kravis Roberts, Gardner Denver, Blackstone Group, Goldman Sachs Group and Johnson & Johnson

Zacks Equity Research

For Immediate Release

Chicago, IL – March 12, 2013 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Kohlberg Kravis Roberts & Co. (KKR), Gardner Denver Inc. (GDI), The Blackstone Group LP (BX), The Goldman Sachs Group, Inc. (GS) and Johnson & Johnson (JNJ).

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Here are highlights from Monday’s Analyst Blog:

Kohlberg Kravis in Expansion Mode

Recently, private-equity firm Kohlberg Kravis Roberts & Co. (KKR) announced its plan to acquire Pennsylvania-based industrial equipment manufacturer Gardner Denver Inc. (GDI) for $3.74 billion. Kohlberg Kravis will pay $76 for each of the outstanding shares of Gardner Denver, which is at a 39% premium to this industrial machinery maker’s closing price on Oct 24, 2012.

The agreement is subject to approvals from the shareholders as well as regulatory bodies and is anticipated to close in the third quarter of 2013. Kohlberg Kravis triumphed over major private equity firms like The Blackstone Group LP (BX).

The Goldman Sachs Group, Inc. (GS) acted as Gardner Denver’s banker for the deal, whereas UBS AG, along with Simmons & Company International, advised Kohlberg Kravis. Subsidiaries of UBS, Barclays, Citigroup, Deutsche Bank, Royal Bank of Canada and Mizuho Financial Group offered debt financing commitments to Kohlberg Kravis.

The acquisition will be immensely beneficial to Kohlberg Kravis, as Gardner Denver boasts of a 100-year old expertise in industrial goods manufacturing as well as technical innovation. For Kohlberg Kravis, it is the third deal in the industrial sector. Earlier, in 2011, it agreed to acquire Capsugel – a division of pharmaceutical major Pfizer Inc. Later that year, another deal was inked with Capital Safety – a supplier of safety gear for construction and other workers.

According to Kohlberg Kravis, the deal is a part of its focus on diverse revenue sources through the introduction of inventive customer-friendly solutions.

We believe the company’s broad diversification strategy positions it comfortably to benefit from enhanced global investment flows. However, the unstable U.S. dollar, volatile equity markets and a sluggish economic recovery, along with mounting competition, make us apprehensive.

Kohlberg Kravis currently carries a Zacks Rank #3 (Hold) whereas Gardner Denver carries a Zacks Rank #2 (Buy).


J&J Seeks EU Nod for Combo Drug

Janssen Cilag International NV, a part of the Johnson & Johnson (JNJ) family of companies, recently announced the submission of a Marketing Authorisation Application (MAA) in the EU for its fixed-dose combination of canagliflozin and metformin (immediate release) for the treatment of type II diabetes patients.

Approval of this fixed dose combination would provide patients with a convenient treatment option. Johnson & Johnson is currently seeking approval for canagliflozin in the US as well as the EU.

Johnson & Johnson had presented encouraging phase III data on canagliflozin at the annual meeting of the European Association for the Study of Diabetes (:EASD) in Oct 2012. The company presented results from CANVAS (CANagliflozin cardioVascular Assessment Study) -- a prospective, double blind, placebo-controlled trial evaluating the efficacy, tolerability and cardiovascular safety of canagliflozin. The study involves 4,330 type II diabetes patients (adults) who are at higher risk for cardiovascular disease.

The data was presented from an 18-week sub-study involving 1,718 patients who had been under insulin therapy for an average of 7.1 years. Johnson & Johnson said that two doses of canagliflozin were evaluated in the study – 100 mg and 300 mg. Patients were randomized to receive either canagliflozin dosage or placebo.

Johnson & Johnson reported a significant decline in blood glucose levels when canagliflozin was used in addition to insulin therapy compared to placebo. Moreover, patients in the canagliflozin arms experienced a reduction in body weight compared to placebo.


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