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Dover Corp. (DOV) said Wednesday it has acquired a Texas company that makes equipment used in extracting oil and gas from low-pressure wells.
Dover will pay about $220 million for Production Control Services Inc. The privately held company, which had revenue of about $90 million last year, will become part of Dover's Norris Production Solutions, which is part of the company's energy business group.
Dover said closing costs for Production Control will cause the deal to be slightly dilutive to Dover's projected 2012 continuing earnings of $4.80 to $5 per share. The company did not offer specifics on the extent of the dilution.
Production Control makes artificial-lift equipment that Dover said is complementary with Norris's product line of lift gear. Artificial-lift equipment is used on wells that lack sufficient pressure to force oil and gas to the surface.
Dover, a Downers Grove, Ill., industrial conglomerate, has been fortifying its energy business with acquisitions in recent years, as rising oil prices and new discoveries of natural gas drive demand for components used on drilling rigs and production equipment.
Revenue from Dover's energy unit increased 25% during the first quarter from a year ago to $532 million. The unit's operating income grew by 42% to $132 million. The business reported an operating margin of nearly 25%, three percentage points higher than a year earlier.
Dover is among the companies pursuing the purchase of Hamilton Sundstrand's pumps and meters business, people familiar with the sale process told the Wall Street Journal on Wednesday. Hamilton Sunstrand is owned by conglomerate United Technologies Corp. (UTX).
News Corp. (NWS, NWSA, NWS.AU) owns Dow Jones & Co., publisher of this newswire, and The Wall Street Journal.
Dover did not immediately return a call seeking comment.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; [email protected]