(By Mani) The Value Act's suggestion to Gardner Denver, Inc. (NYSE:GDI) to explore a possible sale is a new twist in the Pennsylvania-based maker of highly engineered products. The latest development follows after the sudden resignation of CEO Barry Pennypacker, who developed the company's current strategy including operating improvement plans, and mixed quarterly results. The company named Chief Financial Officer Michael Larsen as its interim CEO. ValueAct, which owns 5.1 percent shares in the company, suggested that Gardner Denver pursue a sale partly due to execution risk as the company begins European restructuring while upstream energy markets are in flux. The letter cites United Technologies' (NYSE:UTX) 3.5 billion sale of Hamilton Sundstrand industrial as a reference. The near-term news of a strategic review and European restructuring details could be additional positives for shares, which rallied 10 percent on Friday on the news. "In our view, the Board has little to lose by exploring a sale and a private equity deal would have the best chance (vs. strategic buyer or break-up)," RBC Capital Markets analyst Jamie Sullivan wrote in a note to clients. Meanwhile, investor focus departure from pure downside considerations of late and shift beyond energy/fracking and other cyclicality to consider long-term operating improvements and earnings potential. In addition, diversity across segments and within segments (EPG has drilling/frac pumps, industrial pumps, OEM compressors, loading arms) leave few strategic fits. A break-up could be a lengthy process potentially cheap nike air max shoes adding unneeded operational uncertainty. Private equity has the most potential given cashflows, margin improvement progress/potential, and cheap/available debt. "We calculate 80/share (~40% upside) at 9x our below consensus 2013 EBITDA estimate (trough 432M vs. Street 446M) using year-end 2013 balance sheet," Sullivan added. Gardner Denver, which was spun out of Cooper Industries in 1994, generated about 2.4 billion in revenues in 2011 revenues. It makes compressors, liquid ring pumps and blowers for various industrial, medical, environmental, transportation. The company also provides related aftermarket products, which typically represent about 30 percent of total revenue, and holds the number one or two positions in all of its addressable markets both domestically and abroad. The company has significant exposure to cyclical markets, including energy, industrial, and transportation, which represents roughly 50 percent of revenue and is susceptible to economic downturns in the U.S. and abroad. Gardner Denver's growth has historically been dependent on acquisitions and their relatively seamless integration. Since its separation from Cooper Industries, the company has completed more than 20 acquisitions, largely in the United States and Europe. For the second quarter, Gardner Denver reported a profit of 75.3 million or 1.51 per share, higher than 67.1 million or 1.27 per share in the comparable quarter last year. Quarterly revenues totaled 613.0 million, up 0.4 percent from 610.7 million last year. Analysts, on average, expected earnings of 1.42 a share on revenue of 626.08 million. The company sees earnings in the range of 1.12 to 1.22 per share for the third quarter. Adjusted earnings are expected to range between 1.15 and 1.25 per share. Analysts currently expect the company to earn 1.23 per share for the third quarter. However, the company lowered its full year 2012 earnings view to 4.90 to 5.10 per share from 5.20 to 5.40 per share. Adjusted earnings are expected to be 5.30 to 5.50 per share, down from 5.60 to 5.80 per share. Analysts currently expect nike air max shoes outlet earnings of 5.39 per share for the fiscal-year 2012.