Rating Action: Moody's affirms Dover's Baa1 senior unsecured rating; outlook remains stableGlobal Credit Research - 09 Feb 2022New York, February 09, 2022 -- Moody's Investors Service ("Moody's") has affirmed all ratings of Dover Corporation ("Dover"), including the Baa1 senior unsecured debt rating and Prime-2 short term rating. The outlook remains stable.The ratings affirmation reflects Moody's expectations that Dover will experience modest organic growth across its businesses at steady margins in 2022."Dover's diverse portfolio of businesses have performed well through market disruptions and supply chain challenges over the past two years" says David Berge, Moody's Senior Vice President and lead analyst for the company. "Successfully integrating acquisitions and mitigating the impacts of on-going cost inflation will be key factors for sustaining margins over the next few years," said Berge.Affirmations:..Issuer: Dover Corporation....Senior Unsecured Commercial Paper, Affirmed P-2....Senior Unsecured Regular Bond/Debenture, Affirmed Baa1 Outlook Actions: ..Issuer: Dover Corporation ....Outlook, Remains Stable RATINGS RATIONALE The Baa1 rating reflects Dover's good customer and geographic diversification serving various end markets, with strong long-term growth potential. By effectively integrating acquisitions while also divesting lower performing or more volatile businesses, Moody's expects the company to generate attractive profit margins and return on assets across its businesses. Through a strong rebound in earnings in 2021 along with management's conservative financial policies that have prevented any material increase in debt, Dover has reduced financial leverage substantially in 2021. Debt-to-EBITDA, which had ranged between 2.5x and 3.0x in recent years, was about 2.0x at the end of 2021. The company will maintain robust liquidity supported by sizeable cash balances and strong free cash generation.The ratings are constrained by the revenue volatility inherent in the short-cycle businesses in which Dover operates across its five segments. As well, Moody's believes that the company will continue to grow its portfolio of businesses primarily through acquisitions, as evidenced by over $1.1 billion in investments (about $840 million net of divestitures) in 2021 alone. This represents a pace of acquisitions that would entail increasing integration risk, which could hold back margin improvement. Moody's believes it likely that Dover would raise debt if it were to complete one or more large transactions.The stable ratings outlook reflects Moody's expectations for modest organic revenue growth in 2022 and 2023, with EBITA margins maintained at close to 20% over that period. Moody's expects Dover to maintain leverage in the mid-2x range over that period, pro forma for assumed acquisitions.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSDover's ratings could be upgraded if it demonstrates a long-term commitment to a more conservative debt structure, with debt to EBITDA sustained close to 2.0x over a prolonged period. Also, the company would need to show it can grow and further diversify its revenue base. Continued smooth integration of acquisitions without a material increase in debt or reduction in margins could also support higher ratings.Ratings could be downgraded if Dover sustains higher debt from executing an acquisitive growth strategy or for funding larger share repurchases. A downgrade could be warranted if debt-to-EBITDA is sustained above 3.0x or retained cash flow to debt is sustained below 15%. A decline in EBITA margins to the low teens range could also lead to a ratings downgrade.Dover Corporation, headquartered in Downers Grove, Illinois, is a diversified global manufacturer of equipment and components, specialty systems and support services. The company reports through five operating segments: Clean Energy and Fueling, Pumps & Process Solutions, Imaging & Identification, Engineered Products, and Climate & Sustainability Technologies. Revenue is approximately $7.9 billion.The principal methodology used in these ratings was Manufacturing published in September 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1287885. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.coPlease see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. David Berge, CFA Senior Vice President Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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