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Dover (DOV) to Acquire Belanger to Boost OPW Business Unit

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Dover Corporation (DOV - Free Report) has recently entered an agreement to acquire Belanger, Inc. — a leading full-line car-wash equipment maker. The buyout will boost Dover’s OPW business unit’s performance, using Belanger’s strong engineering and innovative solutions. Financial terms of the transaction were not disclosed.

Why Belanger?

Headquartered in Northville, MI, Belanger employs more than 150 people in the United States. It served the car wash industry for nearly 50 years. The company generated approximately $55 million in sales in 2018.

Nowadays, the demand for professional vehicle wash systems is growing due to the shift from manual washing to automated high-throughput professional systems. The buyout is fit for Dover as the company is aiming to expand its presence in the vehicle wash solutions market because of the increasing popularity of commercial car washes.

With the Belanger buyout, Dover will be able to offer car wash equipment and supply systems, with strong brands in conveyor tunnel and in-bay automatic segments as well as large vehicle wash solutions. Moreover, the transaction reflects Dover's commitment to deploy capital in core markets.

Benefits for Dover

Following the close of the transaction, Belanger will become part of Dover’s OPW business unit — a global leader in fluid handling solutions — in Dover’s Fluids segment.

Dover expects the acquisition to be accretive to margins and adjusted EPS in the first year of the buyout. The Belanger buyout will also deliver a double-digit return on capital in three years, after the completion of the acquisition. The transaction is subject to customary closing conditions and is expected to close in early 2019.

Acquisitions Drive Dover’s Growth

Dover has a long tradition of making successful acquisitions in diverse end markets. In January 2018, Dover acquired Ettlinger Group in a bid to boost presence in the plastics and polymers processing equipment industry. Ettlinger’s high-performance filtration systems will fortify Dover’s Maag business’ position in the plastics-processing equipment industry. The buyout of Rosario Handel will aid its Food Equipment business unit.

Share Price Performance

Over the past year, shares of Dover have decreased around 26% compared with the industry’s decline of around 17%.

 


Zacks Rank & Stocks to Consider

Dover currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are Alarm.com Holdings, Inc. (ALRM - Free Report) , Axon Enterprise, Inc and CECO Environmental Corp. . While Alarm.com and Axon currently sport a Zacks Rank #1 (Strong Buy), CECO carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alarm.com has a long-term earnings growth rate of 17%. The stock has rallied 51% over the past year.

Axon has a long-term earnings growth rate of 25%. Shares of the company have soared around 79% in a year’s time.

CECO has a long-term earnings growth rate of 15%. The stock has surged 36% over the past year.

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