Dover Buys Harbison-Fischer - Analyst Blog

Dover Corporation (DOV) announced that it has acquired Crowley, Texas-based leading designer and manufacturer of down-hole rod pumps and related products, Harbison-Fischer, Inc., for $402.5 million. Dover expects the acquisition to boost its earnings in 2011.

Harbison-Fischer will be consolidated into Norris Production Solutions, an operating unit within Dover's Fluid Management segment. Norris Production Solutions is a leading manufacturer and provider of integrated products and solutions across the artificial lift spectrum for oil & gas production.

Harbison-Fischer products are used extensively in artificial lift applications globally with 2011 revenue pegged at an approximate $160 million.

The acquisition is a strategic fit for Norris Production Solutions as well as Dover's Energy platform. The acquisition will expand Norris Production Solutions' portfolio of industry-leading technology in artificial lift and will enable it to deliver highly-valued, comprehensive down-hole rod lift solutions to its customers. Dover expects the acquisition to aid the company better penetrate the attractive international oil and gas markets.

This is Dover's second acquisition announcement in less than a fortnight. Dover earlier announced an $855 million deal to acquire NXP Semiconductors NV's (NXPI) Sound Solutions business, which makes speaker and receiver components for the mobile handset market.

For fiscal 2010, Dover expects revenue to grow in the range of 20%–21%, fueled by an organic revenue growth of 16.5%–17.5% and a 3.5% fillip from acquisitions. Management also projects EPS in the range of $3.50–$3.55, which, however, includes the third quarter tax benefit of 20 cents. Excluding this benefit, the guidance range stands at $3.30–$3.35.

Solid performance and bookings across all segments allied with the ability to generate strong cash flow, continued focus on margin improvement and shareholder value position Dover for better results in the upcoming quarters. Further, it continues to pursue strategic acquisitions to improve its product offering and complement its organic growth strategy. We currently have a Zacks #2 Rank (short-term Buy recommendation) on the stock.

New York-based Dover is an industrial conglomerate producing a wide range of specialized industrial products and manufacturing equipment. Dover caters to a diverse clientele primarily spread over the Americas, Europe, and Asia. The company classified its business into four segments – Industrial Products, Engineered Systems, Fluid Management, and Electronic Technologies. Dover competes with the likes of Cooper Industries plc (CBE), Ingersoll-Rand Plc (IR) and Weatherford International Ltd. (WFT).

 
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