Dover has completed the acquisition of Acme Cryogenics, Inc. for $295m in cash and entered into a definitive agreement to acquire Engineered Controls International, LLC (RegO) for $631m in cash.
The RegO acquisition includes tax step-up benefits with a net present value of approximately $35m and both businesses will become part of the OPW Global operating unit within Dover’s Fuelling Solutions segment.
Allentown, Pennsylvania-based Acme and Elon, North Carolina-based RegO are well-established providers of highly-engineered components and services for the production, storage, and distribution of cryogenic gases.
The businesses supply valves, regulators, vacuum jacketed piping, fittings, safety devices, liquefied natural gas fueling components, and other specialty flow control devices to customers from a variety of end-markets.
Dover sees the acquisitions as part of its focus on clean energy solutions and says the companies’ products will enhance its “offerings for the hydrogen, liquefied natural gas (LNG), and liquefied petroleum gas applications, as well as Dover’s participation in the attractive cryogenic industrial gases end market”.
In October, Dover announced the acquisition of LIQAL, a supplier of LNG and hydrogen refuelling equipment and solutions.
Dover’s President and Chief Executive Officer, Richard J. Tobin, said, “The acquisitions of Acme and RegO are the next step in our strategy to enhance the Fuelling Solutions portfolio with growing participation in clean fuels and other attractive adjacencies. On the back of our recent acquisition of LIQAL and our partnerships in electric vehicle charging, these two acquisitions will scale up our position as a leader in the growing clean and alternative fuel applications as investments in this space are rapidly accelerating. We are also excited to establish a position in an attractive cryogenic gas adjacency, which offers robust organic and inorganic growth prospects. The business models of Acme and RegO are a great fit for Dover, as their offerings mainly include components that are critical to performance, safety and compliance of larger systems, their go-to-market models are based on a mix of long-tenured loyal OEM, distribution and end-customer relationships, and their long-term success in the marketplace is driven by innovation, engineering and manufacturing excellence. We are excited about the strong growth prospects of these strategic additions to our portfolio and our ability to drive significant value creation by leveraging Dover’s operating scale and enterprise capabilities.”
Acme employs approximately 205 people and is expected to generate approximately $70m in sales in full year 2021, and RegO employs approximately 725 people and is expected to generate approximately $210m in sales in full year 2021, according to a statement from Dover.
Acme’s key products includes vacuum jacketed, piping, valves and manifolds, while RegO’s are valves, regulators and safety devices.
Both businesses grew in 2020, with Acme generating double-digit average annual revenue growth (excluding impact of acquisitions) over 2018-2021 and RegO delivering annualised growth in the high-single digits over the same period.
After closing of both acquisitions, the expanded clean energy applications within Dover’s Fuelling Solutions are expected to generate over $300 million in annual sales, including approximately $100 million of sales from cryogenic gas applications.
The RegO transaction, which is expected to close in the fourth quarter of 2021, is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.
Dover, a global manufacturer and solutions provider with annual revenue of over $7 billion, has headquarters in Downers Grove, Illinois, Dover trades on the New York Stock Exchange. It offers solutions for fuelling, pumps and process for the safe handling of fluids across the chemical, hygienic, oil and gas and industrial markets. Dover also equipment and systems serving the commercial refrigeration, beverage equipment and heating and cooling markets.