ACQUISITION CRITERIA

TYPE OF BUSINESS

We seek manufacturers of high-value-added (product design/intellectual property or manufacturing process), engineered industrial products whose performance is critical to the customer or have defensible differentiation, and whose markets have high barriers to entry.
Our focus is on industrial components and products sold to a broad customer base of industrial and/or commercial users, with recurring revenue characteristics very desirable.
We prefer companies that are market leaders with either a number one or strong number-two market position in their respective markets or product areas, and that have longer product life cycles with low or moderate market and revenue volatility.
Companies should have a strong ethic of focusing on customers, including excellent customer relationships and intimacy, and providing high-value-added customer solutions.
Candidates should have strong regional or national distribution with existing or potential for global distribution and, particularly for stand-alone acquisitions, strong growth potential.

Since we seek market leaders, we generally look for outstanding operating financial performance that can be built upon. EBITs above 15% are the norm in Dover operating companies. We also expect that any business we own will generate significant growth over time.
"Add-on" business or product lines can be of any size if they are a good strategic fit with an existing Dover operating company. We look for synergy opportunities and the ability to add value to the acquisition. Management continuity for add-ons depends on the size and the extent to which the acquisition will be integrated with the acquiring Dover company.
"Stand-alone" businesses should generally have revenue of $100 million or more. Stand-alone acquisitions should fit within one of Dover’s four operating segments (Industrial Products, Engineered Systems, Fluid Management, or Electronic Technologies) or be focused growth platforms to leverage the strengths of the Dover organization. Management skill and continuity is even more critical for stand-alone acquisitions.
We are typically cash buyers but will entertain a tax-free exchange for Dover stock. We expect to do a thorough due diligence review, sign a fair contract, and close promptly following signing a letter of intent providing a period of exclusivity within which to complete the transaction.

Dover seeks to buy businesses that typically have strong management teams in place. The Dover culture and philosophy expects the operating management team to own product development, manage the customer relationships, and operate the business as if they own it. Dover will assist them by leveraging the strengths of the Dover organization (global sourcing, regional infrastructure, leadership and people development, and other support services). We have long-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 key factors in our decision-making.
Dover buys companies for the long term, with a focus on growing global platforms. We do not have a "portfolio" mentality.

Stephen R. Sellhausen
Vice President, Corporate Development
280 Park Ave
New York, NY 10017
Phone: 212-849-4510
Fax: 212-922-1656

David G. Martin
Director, Corporate Development
1415 West 22nd Street
Oak Brook IL 60523
Telphone: 630-861-2762
Fax: 630-861-2767