Dover to Sell Environmental Solutions Group Business Unit

Rhea-AI Summary

Dover (NYSE: DOV) has announced the sale of its Environmental Solutions Group (ESG) business to Terex (NYSE: TEX) for $2 billion. ESG, part of Dover's Engineered Products segment, is a leading provider of refuse collection vehicles, compactors, and balers, along with related aftermarket equipment and digital offerings. The Chattanooga-based unit generated approximately $750 million in revenue in 2023.

The transaction is expected to close before the end of 2024, subject to regulatory approvals and customary closing conditions. Dover's CEO, Richard J. Tobin, expressed gratitude to ESG's management team for their transformational efforts over the past decade. Centerview Partners and Skadden, Arps, Slate, Meagher & Flom LLP served as financial advisor and legal counsel to Dover, respectively.

Positive

• Sale of ESG business for $2 billion, potentially improving Dover's financial position
• ESG generated approximately $750 million in revenue in 2023, indicating a strong valuation for the sale

Negative

• Divestiture of a significant revenue-generating business unit
• Potential loss of diversification in Dover's business portfolio

Financial Analyst

The sale of Dover's Environmental Solutions Group (ESG) to Terex for $2 billion is significant. It suggests a strategic shift for Dover, focusing on core strengths or potentially freeing up capital for other investments. ESG had generated about $750 million in revenue in 2023, which is a substantial portion of Dover's income. This transaction can be seen as a move to streamline operations and possibly enhance shareholder value by reallocating resources more efficiently. For retail investors, the key takeaway is that Dover might use the proceeds to reduce debt, reinvest in higher-margin businesses, or return capital to shareholders through buybacks or dividends, all of which could positively impact Dover's stock price.

Market Research Analyst

From a market perspective, Terex's acquisition of ESG could be transformative. ESG's expertise in refuse collection vehicles and related tech aligns well with Terex's strategic goals, marking an expansion into new market segments. This move not only diversifies Terex's portfolio but also strengthens its position in the waste management industry. For investors, this could mean increased revenue streams and market share for Terex. The integration of ESG’s digital offerings such as predictive maintenance and route management software could also drive long-term value creation. However, it's worth monitoring how effectively Terex integrates these new capabilities to avoid potential operational disruptions.

Legal Expert

The transaction includes standard closing conditions and regulatory approvals, which are typical in such high-value deals. However, the legal landscape must be diligently navigated to avoid any compliance issues that could delay the closing. For investors, the key point is to watch for any potential regulatory hurdles that could impact the timeline. Any significant delays could affect the anticipated benefits of the transaction. Both companies have engaged reputable legal advisors, indicating a strong commitment to ensuring a smooth and compliant process. Investors should feel somewhat reassured by the involvement of experienced legal counsel like Skadden, Arps, Slate, Meagher & Flom LLP.

DOWNERS GROVE, Ill., July 22, 2024 /PRNewswire/ -- Dover (NYSE: DOV) today announced that it has entered into a definitive agreement to sell its Environmental Solutions Group business ("ESG"), which is part of Dover's Engineered Products segment, to Terex Corporation (NYSE: TEX) for $2 billion on a cash- and debt-free basis, subject to customary post-closing adjustments.

Based in Chattanooga, TN, ESG is a leading provider of refuse collection vehicles, compactors, and balers, as well as related aftermarket equipment and digital offerings, including onboard vehicle safety systems, route management, predictive maintenance, and customer relationship management software. ESG generated approximately $750 million of revenue in 2023.

Dover's President and Chief Executive Officer, Richard J. Tobin, said, "ESG has been a part of the Dover family for decades and has created significant value for Dover shareholders over this time period. I would like to recognize and thank ESG President Pat Carroll and his management team for the transformational change in the business over the last decade."

The transaction is expected to close before year-end 2024, subject to customary closing conditions, including receipt of regulatory approvals.

Centerview Partners acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Dover.

About Dover:

Dover is a diversified global manufacturer and solutions provider with annual revenue of over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of approximately 25,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.

Forward-Looking Statements:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the timetable for completing the transaction.  Forward-looking statements are subject to numerous important risks, uncertainties, assumptions, and other factors, some of which are beyond the Company's control.  Factors that could cause actual results to differ materially from current expectations include, among other things, general economic conditions and conditions in the particular markets in which we operate, and the ability of both parties to obtain the necessary regulatory approvals or to satisfy any of the other conditions to the transaction in a timely manner or at all. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements that may be contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, www.dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Contact:	Media Contact:
Jack Dickens	Adrian Sakowicz
Senior Director - Investor Relations	Vice President – Communications
(630) 743-2566	(630) 743-5039
jdickens@dovercorp.com	asakowicz@dovercorp.com

 

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SOURCE Dover

FAQ

What is the value of Dover's (DOV) sale of its Environmental Solutions Group business?

Dover (DOV) is selling its Environmental Solutions Group business to Terex for $2 billion on a cash- and debt-free basis, subject to customary post-closing adjustments.

When is the Dover (DOV) Environmental Solutions Group sale expected to close?

The sale of Dover's (DOV) Environmental Solutions Group to Terex is expected to close before year-end 2024, subject to customary closing conditions and regulatory approvals.

How much revenue did Dover's (DOV) Environmental Solutions Group generate in 2023?

Dover's (DOV) Environmental Solutions Group generated approximately $750 million of revenue in 2023.

Who are the financial and legal advisors for Dover (DOV) in the Environmental Solutions Group sale?

Centerview Partners acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Dover (DOV) in the sale of its Environmental Solutions Group.