ACQUISITION CRITERIA
TYPE OF BUSINESS
- We seek manufacturers of high value-added, engineered products.
- Our focus is on equipment and machinery sold to a broad customer base of industrial and/or commercial users.
- We prefer companies that are niche-oriented market leaders with either a #1 or a strong #2 market position.
- Candidates should have strong national distribution (if not international, which is preferred).
MANAGEMENT
- Dover is decentralized--we will only buy businesses which have strong management teams in place. We expect management of each operating company to behave as the emotional owners of that business and we have longer term financial incentives designed to encourage continued growth of the business.
- Our judgment on the skill, energy, ethics and compatibility of the top executives at each acquisition candidate is one of the most critical factors in our decision making.
- We expect that operating companies will continue to be run by the management team in place upon acquisition. This reflects our decentralized structure and the fact that Dover buys companies for the long term; we do not have a 'portfolio' mentality.
FINANCIAL
- Since we seek market leaders, we expect outstanding operating financial performance that can be built upon. EBIT's above 15% are the norm in Dover operating companies. We also expect that any business we own will generate significant real growth over time.
- 'Stand alone' businesses should generally have EBIT of $10.0 million (or be on a growth trend to achieve that level within 2 years). We expect no 'synergies' with 'stand alone' acquisitions as each operates independently.
- 'Add on' businesses or product lines can be of any size that makes good business sense when combined with an existing Dover company. We do expect 'synergy' for 'add on' acquisitions. Management continuity for 'add on's' depends on the size and the extent to which the acquisition will be integrated with the acquiring Dover company.
- We are cash buyers (but, will entertain a tax free exchange for Dover stock, which we view as a more expensive medium of exchange). We expect to do a thorough due diligence review, sign a fair contract and close within 60 days of signing a letter of intent providing a period of exclusivity within which to complete the transaction.
CONTACT INFORMATION
Robert A. Tyre
Vice President, Corporate Development
280 Park Ave
New York, NY 10017
Phone: 212-849-4515
Fax: 212-953-4326
A. Graeme McMahon
Director of Corporate Development
Babmaes House
2 Babmaes Street
London SWIY 6HD UNITED KINGDOM
Line: 44 20-7451-7010
Fax: 44 20-7451-7011