NORWALK, Conn. - Terex Corporation (NYSE: NYSE:TEX), a global manufacturer of materials processing machinery and aerial work platforms, has announced the acquisition of Environmental Solutions Group (ESG) from Dover Corporation (NYSE: NYSE:DOV) in a transaction valued at $2.0 billion. The net purchase price, considering expected tax benefits, stands at $1.725 billion.
The deal, which is anticipated to close in the second half of 2024, subject to regulatory approvals and customary conditions, is set to enhance Terex's position in the waste and recycling sector. ESG, known for its design and manufacturing of refuse collection vehicles and waste compaction equipment, is expected to contribute $25 million in cost and revenue synergies by 2026.
Terex's acquisition of ESG is a strategic move to reduce business cyclicality and capitalize on a growing market. ESG's robust performance, with a 7%+ long-term organic revenue compound annual growth rate over the past decade, is slated to add 130 basis points of margin accretion to Terex's EBITDA.
The transaction also positions Terex as a market leader in North America's waste and recycling segment, expanding its addressable market and increasing its North American exposure to 65%, with a global market opportunity now estimated at $40 billion.
The integration of ESG will create a new Environmental Solutions segment within Terex, combining it with Terex's existing Utilities business. This move is expected to yield significant financial benefits, including revenue growth, improved free cash flow, and double-digit percentage adjusted earnings per share accretion in 2025.
Terex has secured fully committed debt financing from UBS Investment Bank for the acquisition and expects to maintain a net leverage ratio of 2.2x for 2024, with a further reduction anticipated by the end of 2025.
The announcement comes alongside Terex's plans to host an investor conference call today, Monday, to discuss the transaction details further. The company also intends to discuss its second-quarter financial results for 2024 in a conference call scheduled for July 31, 2024.
This information is based on a press release statement from Terex Corporation.
In other recent news, Dover Corporation, a diversified global manufacturer, has been making significant strides in its financial performance.
The company's first-quarter earnings exceeded analyst estimates, with an adjusted EPS of $1.95, surpassing the expected $1.87. Revenue for the quarter also surpassed expectations, reaching $2.09 billion against the consensus estimate of $2.04 billion. This represents a slight increase compared to the same period last year, despite an organic revenue decline.
In other developments, Mizuho Securities has revised its outlook on Dover, raising its price target to $185 from the previous $180. This adjustment is based on the company's strong start to the year, characterized by positive orders and growing momentum. Mizuho has also revised its earnings per share estimates for Dover for 2024 and 2025, increasing them to $9.10 and $9.75, respectively.
In response to these developments, Dover's management has expressed optimism about the company's overall setup. They have also narrowed their full-year adjusted EPS guidance to the higher end of the range, forecasting GAAP EPS between $10.78 and $10.93 and adjusted EPS between $9.00 and $9.15. These recent developments indicate a positive outlook for Dover's financial future.
InvestingPro Insights
As Terex Corporation (NYSE: TEX) positions itself for strategic growth with the acquisition of Environmental Solutions Group from Dover Corporation (NYSE: DOV), investors may find Dover's financial health and market performance to be of interest. Here are some key insights from InvestingPro:
Dover Corporation, with a robust market capitalization of $25.25 billion, boasts a track record of consistent dividend growth, having raised its dividend for 54 consecutive years, which may appeal to income-focused investors. This dedication to shareholder returns underscores Dover's financial stability and disciplined capital allocation strategy.
An analysis of Dover's trading metrics reveals that the company is trading at a low P/E ratio of 17.54 relative to near-term earnings growth, suggesting it may be undervalued compared to its future earnings potential. Additionally, Dover's stock is noted for its low price volatility, providing a potentially stable investment option in a market that can often be turbulent.
For those looking to delve deeper into Dover's financials and stock performance, InvestingPro offers additional insights, including the fact that analysts predict the company will remain profitable this year, an important consideration for investors assessing the company's future post-transaction. With the company's strong return over the last five years and its moderate level of debt, Dover appears to be on solid financial footing.
To access a comprehensive list of InvestingPro Tips for Dover Corporation, which includes 9 additional insights, investors can visit https://www.investing.com/pro/DOV. And for those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. This code can provide valuable savings for those seeking in-depth analysis and real-time data to inform their investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.