Dover (DOV) To Buy Em-tec, Sees Growth In Biopharma Market
Zacks Investment Research | Mar 17, 2020 09:57PM ET
Dover Corporation (NYSE:DOV) has entered into an agreement to acquire Em-tec GmbH ("Em-tec"), in a bid to expand its presence in the biopharma market. Em-tec will be part of the Pump Solutions Group (PSG) business unit within Dover’s Pumps & Process Solutions segment following the deal’s closure.
German-based Em-tec is a leading manufacturer and designer of flow measurement devices for a broad range of medical and biopharmaceutical applications. The company produces innovative flow measurement equipment where flexible tubing is used for vascular, cardiac and transplant surgeries, life support procedures, laboratory and automated bioprocess monitoring, and industrial processes. Em-tec has founded non-invasive flow measurement by using the ultrasound transit-time principle. As a result, its devices deliver greater measurements compared with other offerings.
The latest acquisition will aid Dover to further expand its offerings into biopharma and other hygienic applications, while also boosting its flow-control technologies portfolio with flow-rate sensors.
Dover’s PSG unit is a global leader in the manufacture of pumps, systems and related technologies. Hence, PSG's Quattroflow pump technology and Em-tec's flow measurement devices will allow Dover to serve its customers in biopharma and medical applications.
The transaction supports Dover’s strategy to enhance its portfolio with bolt-on acquisitions by creating shareholders’ value and profitable growth. The deal is likely to close in the second quarter this year.
Dover has a tradition of making successful acquisitions in diverse end markets. In 2019, the company acquired three businesses for a total consideration of $216.4 million. The company made these acquisitions to complement and expand its existing operations within the Fueling Solutions and Pumps & Process Solutions segments. This January, Dover completed the acquisition of Systech International. The buyout supports Dover’s marking and coding portfolio, and will enhance software and service revenues within Markem-Imaje. The deal is expected to be accretive to the first-year adjusted EPS.
In addition, the company is likely to gain from product digitization, e-commerce, new product development and inorganic investment in core business platforms. The company has initiated several growth and productivity capital projects and aims to invest in can-forming and heat-exchanger businesses to capture growing volumes and upgrade competitive capabilities.
Moreover, Dover’s cost-reduction initiatives are likely to boost its margins. The company has executed restructuring programs to better align costs and operations with the current market conditions through targeted facility consolidations, headcount reduction and other measures.
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Dover projects current-year adjusted EPS at $6.20-$6.40 compared with the prior estimate of $5.75-$5.85. The guidance reflects a robust order backlog across all business segments, productivity and cost-containment initiatives, and execution of margin targets.
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Dover, along with Graco Inc. (NYSE:GGG) , falls under the Original post
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