Dover Buys Maker Of Artificial-Lift Equipment For Low-Pressure Wells
April 25 2012 - 8:05PM
Dow Jones News
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;
robert.tita@dowjones.com
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