Dover Corporation ( DOV Quick Quote DOV - Free Report) has entered into a definitive agreement to acquire Malema Engineering Corporation. It will become part of DOV’s Pumps & Process Solutions segment and enhance its biopharma single-use production offering, which currently includes Quattroflow pumps, CPC connectors, and em-tec flowmeters.
Boca Raton, FL-based Malema is a designer and manufacturer of high-precision, mission-critical flow-measurement and control instruments serving customers in the biopharmaceutical, semiconductor, and industrial sectors. It has facilities in San Jose, CA, Singapore, South Korea, and India. Malema is expected to generate approximately $40-45 million in revenues in 2022.
The deal is valued at $225 million in cash at closing, subject to customary purchase price adjustments, and up to $50 million in contingent consideration dependent on the achievement of certain financial objectives over a two-year period. The deal is expected to close in the ongoing quarter, subject to the satisfaction of necessary approvals.
Malema brings with it a loyal base of blue-chip customers, OEMs and end-users with substantial aftermarket and recurring revenue streams. Malema's first-of-its-kind single-use flow sensor using Coriolis technology offers superior flow-measurement performance and accuracy compared to alternative technologies. It aids in minimizing the scope for measurement error and eliminating the need for calibration in time-sensitive and contamination-intolerant environments.
Dover is working toward building its biopharma platform through proactive capacity additions, new product development, and opportunistic acquisitions of highly-attractive niche component technologies. The bioprocessing industry is full of long-term growth opportunities, courtesy of a robust pipeline of effective novel biologic drugs, biosimilars, protein therapies, non-COVID mRNA vaccines, as well as budding cell & gene therapies. The growing adoption of more efficient single-use production processes will support demand for the company’s offerings of single-use components to end customers. Integrating Malema's technology with Dover’s existing portfolio of single-use pumps for biopharma processing will enhance the accuracy and value proposition of solutions to its customers.
Dover has a long tradition of making successful acquisitions in diverse end markets. Mergers and acquisitions contributed to the top-line growth of $53 million in the first quarter of 2022. Strong demand and robust order and backlog rates supported the top-line growth across the majority of the company’s businesses during the quarter. Total revenues increased 10% year over year to $2,052 million. Dover reported adjusted earnings per share (EPS) of $1.90, which improved 5% year over year.
Dover expects adjusted EPS between $8.45 and $8.65 for 2022. It expects organic revenue growth of 7-9% for the year. Robust demand and record backlog levels will continue to drive the company’s revenues in the current year.
The company recently acquired certain intellectual property associated with electrically operated refuse collection vehicle bodies from Boivin Evolution Inc. The buyout will expand the technological footprint and product portfolio of Dover’s Environmental Solutions Group business unit within its Engineered Products segment.
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Dover’s shares have fallen 13.9% in the past year compared with the
industry’s decline of 28.4%. Zacks Rank and Stocks to Consider
Dover currently carries a Zacks Rank #3 (Hold).
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