Global equipment manufacturer Dover Corp. is making a deal to buy artificial lift specialist Accelerated Cos. LLC to expand its reach in the U.S. unconventional drilling market.
Dover, based in Downers Grove, IL, agreed to pay $430 million to acquire The Woodlands, TX-based operator. Dover is a diversified global manufacturer that provides equipment and components, including artificial lift systems, and it provides support services for engineering, fluids and refrigeration/food equipment.
Dover's artificial lift business is also headquartered in The Woodlands, and synergies would come from the combination. Accelerated not only adds its artificial lift core offerings to Dover's but it will bring expertise in electric submersible pumps (ESP), hydraulic jet pump systems, gas lift systems, surface pumping and modular process systems for filtration, separation, heating and other fluid handling.
"The technology Accelerated brings to our portfolio, combined with our existing rod lift products, allows us to offer our customers the right artificial lift solutions for the complete life of their wells," said Dover CEO Robert A. Livingston. "Accelerated's strong double-digit growth over the past few years has been driven by the company's culture of innovation and customer engagement. Together, Dover...and Accelerated are very well positioned to capitalize on strong production market dynamics."
Soma Somasundaram, chief of Dover's energy segment, said the merger would allow the company "to benefit from the emerging North American trend of installing ESP systems early in the well completion cycle of high flow unconventional oil wells.
"With Accelerated, Dover will not only participate in the fastest growing segment of the artificial lift market, but we will also establish an earlier touch point with our customers. Overall, the products, service presence and talent mix Accelerated brings will help us better serve our customers."
Dover last year had global annual revenues of $8 billion. Accelerated's 2014 revenues are estimated to be $225 million. If the transaction is completed as scheduled, the acquisition in 2015 should provide Dover with 5-6 cents/share.