) has signed a definitive agreement to sell its DEK Printing
Machines unit (DEK) to Hong Kong-listed ASM Pacific Technology.
The sale, which is expected to close by mid 2014, is expected to
generate cash proceeds of $170 million in addition to a
contingent consideration of $30 million, subject to normal
The news does not come as a surprise as the unit had been put on
the block for a year. Dover had announced its plan to divest
Everett Charles Technologies (including the Multitest business)
and DEK at the time of releasing its fourth quarter 2012 results.
These two non-core businesses served the electronic assembly and
The businesses were classified as discontinued operations since
then. Subsequently, in Sep 2013, Dover entered into an agreement
to sell its Multitest and Everett Charles Technologies (ECT)
) for $93.5 million.
DEK came under the umbrella of Dover when it was acquired in
1983. DEK is a global provider of advanced materials deposition
technologies and support solutions including printing equipment
platforms, stencils, precision screens and mass imaging processes
used primarily in the electronics industry.
The DEK business till now was part of Dover's Printing &
Identification segment. The Printing & Identification segment
is a worldwide supplier of precision marking and coding,
printing, dispensing, soldering and coating equipment and related
consumables and services. The segment currently serves two global
end-markets: Fast Moving Consumer Goods (FMCG) and Industrial.
The segment generated $1 billion in sales in 2012, which was 12%
of Dover's total revenue. In the first nine months of fiscal
2013, the segment contributed 11% of total revenue with segment
sales of $745 million.
This current sale along with the previously announced spin-off of
certain parts of communication technologies businesses into a
standalone, publicly-traded company will simplify Dover's
business profile and enable it to focus on its key industrial
growth spaces -energy, refrigeration & food equipment,
fluids, and printing & identification. Dover will continue to
benefit from its active acquisition pipeline in these spaces as
well as solid booking and orders growth. Dover's sound balance
sheet coupled with solid earnings growth should allow the company
to continue its dividend hike and share repurchases in the years
Illinois-based Dover is an industrial conglomerate producing a
wide range of specialized industrial products and manufacturing
equipment. It operates through four major operating segments:
Communication Technologies, Energy, Engineered Systems and
Printing & Identification.
Dover currently retains a Zacks Rank #3 (Hold). Some
better-ranked stocks in the machinery-general industrial sector
). While Xylem carries a Zacks Rank #1 (Strong Buy), Flowserve
holds a Zacks Rank #2 (Buy).
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