Dover Acquires FW Murphy For $530M, Expects Deal To Boost Margin

Dover Corp DOV inked a deal to acquire FW Murphy Production Controls, LLC, a subsidiary of privately-owned Genisys Controls LLC, for $530 million in cash.

The acquisition cost, net of positive tax attributes, represents about 13x of FW Murphy's 2023 Adjusted EBITDA, with accretive to DOV's margin.

FW Murphy offers control and optimization solutions for the reciprocating compression industry in natural gas production, transportation, industrial, emerging hydrogen, and carbon capture applications markets. 

FW Murphy is projected to generate revenue of around $120 million in 2023, with substantial aftermarket and recurring revenue. 

The transaction is expected to close in Q4 2023, subject to customary closing conditions and regulatory approvals.

Post-acquisition closure, FW Murphy will become part of the Dover Precision Components (DPC) operating unit within the Pumps & Process Solutions segment.

"FW Murphy is a highly regarded technological pioneer and leader in controlling and optimizing the performance of reciprocating compressors and engines. Adding its portfolio of solutions will allow DPC to offer reciprocating compression customers an unparalleled choice of technologies to improve efficiency, promote safety, reduce their carbon emissions, and accelerate clean energy adoption. We expect to achieve tangible growth synergies from our combined product offerings and global go-to-market channels," stated Marcell Ulrichs, President of DPC.

Dover generated an operating cash flow of $195.3 million in Q2, compared to $178.8 million a year ago, with FCF standing at $155.2 million in Q2 vs. $128.6 million a year ago. 

Price Action: DOV shares closed higher by 0.10% at $137.92 on Wednesday.