Dover (DOV) Closes FW Murphy Acquisition, Boosts Portfolio
Dover Corporation DOV announced that it completed the previously announced acquisition of FW Murphy Production Controls, LLC. This move is in sync with Dover’s long tradition of making successful acquisitions in diverse end markets.
On Oct 04, the companies entered the deal for a cash consideration of $530 million, subject to closing conditions. The transaction price, net of positive tax attributes, represents roughly 13X of FW Murphy's 2023 adjusted EBITDA, with its margin accretive to Dover's consolidated margin.
Founded in 1939, FW Murphy provides reciprocating compressor control, remote monitoring, digital-twin-based predictive maintenance, and adaptive performance optimization components, solutions and instruments. Headquartered in Rosenberg, TX, the business is projected to generate $120 million in revenues in 2023, with significant aftermarket and recurring revenues.
FW Murphy will become part of Dover's Pumps & Process Solutions segment's Dover Precision Components operational unit. Dover anticipates the combined product range and global go-to-market channels to result in tangible growth synergies.
The Pumps & Process Solutions segment’s revenues dipped 0.5% year over year to $431 million in the third quarter of 2023. The adjusted EBITDA of the segment totaled $130 million, down 6% from the year-ago quarter’s $139 million.
Price Performance
Shares of DOV have gained 3.1% in the past year compared with the industry’s rise of 13.7%.
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Zacks Rank & Stocks to Consider
Dover currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are Brady BRC, Applied Industrial Technologies AIT and A. O. Smith Corporation AOS.
BRC currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $4.00. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. The company has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC have rallied 16.4% in a year.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have moved up 4% in the past 60 days. The company’s shares have gained 27.2% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2023 earnings is pegged at $3.77 per share. The consensus estimate for 2023 earnings has moved 5% north in the past 60 days and suggests year-over-year growth of 20.1%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 29.4% in a year.
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