Dover (DOV) announced that it has entered into a definitive agreement to acquire the business of FW Murphy Production Controls, LLC ("FW Murphy") (a subsidiary of privately-owned Genisys Controls LLC) for $530 million in cash. The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including receipt of regulatory approvals. Following the closing of the transaction, FW Murphy will become part of the Dover Precision Components ("DPC") operating unit within Dover's Pumps & Process Solutions segment ("DPPS").
Founded in 1939 and headquartered in Rosenberg, Texas, FW Murphy is a leading provider of control, remote monitoring, digital-twin-based predictive maintenance, and adaptive performance optimization components, solutions, and instrumentation for reciprocating compressors and associated drive systems. FW Murphy's solutions are used in natural gas production, transportation, and industrial use markets, as well as in emerging hydrogen and carbon capture applications. The business is expected to generate approximately $120 million in revenue in 2023, with substantial aftermarket and recurring revenue. Net of positive tax attributes, the purchase price represents approximately 13x of FW Murphy's 2023 Adjusted EBITDA, with margin accretive to Dover's consolidated margin.
The acquisition adds highly complementary offerings to DPC's Cook Compression® product line, enhances DPC's revenue mix with digital and recurring revenue streams, helps position DPC for leadership in compression technologies for clean energy, and allows DPC to capitalize on the growing adoption of next-generation remote monitoring, predictive maintenance, and real-time performance optimization solutions.
"FW Murphy is a highly regarded technological pioneer and leader in controlling and optimizing the performance of reciprocating compressors and engines. Adding its portfolio of solutions will allow DPC to offer reciprocating compression customers an unparalleled choice of technologies to improve efficiency, promote safety, reduce their carbon emissions, and accelerate clean energy adoption. We expect to achieve tangible growth synergies from our combined product offerings and global go-to-market channels," said Marcell Ulrichs, President of DPC.
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "The acquisition of FW Murphy has all the hallmarks of value-creating bolt-on acquisitions that have been an integral part of Dover's strategy for decades. FW Murphy is a well-run, privately-owned technological leader with a runway for sustained profitable growth. We are excited to add a high-quality asset with an attractive financial profile and value-creation potential to DPPS."
