* New company would have revenue of $1.3 bln
* Dover to focus on industrial businesses
* Shares rise as much as 5 pct
By Mridhula Raghavan
May 23 U.S. industrial conglomerate Dover Corp
said it plans to spin off most of its communication
technologies businesses into a publicly traded company to focus
on its industrial businesses, sending its shares up as much as 5
The businesses, to be folded into the company's Knowles Corp
unit, mainly make microphones, speakers, receivers and other
products used in smartphones.
Dover's other products include industrial pumps, oil and
mining drilling tools and food packaging equipment.
"As a standalone business, Knowles will be able to attract a
natural set of investors who are much more interested in the
consumer electronics space than your typical industrial
investors," Chief Executive Robert Livingston told Reuters on
"(The spinoff) clearly brings the focus back inside Dover to
our core industrial business, focused around energy, fluids and
The new company's brands -- which will include Knowles,
Sound Solutions, Dielectric, Novacap, Syfer and Vectron -- is
expected to have annual revenue of about $1.3 billion.
Dover bought Knowles Corp, a maker of acoustic products, in
2005 for $750 million.
The company said it would retain businesses in the
communications technologies segment that make components for
aerospace and defense industries and fluid applications.
"The communication technologies business specifically was
not aligned with the industrial profile of Dover," Ascendiant
Capital Market analyst Christopher Bamman said.
Dover said the transaction would be in the form of a 100
percent distribution of the stock of Knowles, which will be
tax-free for Dover and U.S. shareholders.
The conglomerate said its annual revenue for 2013 would be
$7.4 billion to $7.6 billion, on a proforma basis, upon
completion of the deal, which is expected in early 2014. Revenue
in 2012 was $8.1 billion.
Dover said it would record one-time costs of $60 million to
$70 million related to the transaction.
The expanded Knowles Corp will be headed by Jeffrey Niew,
who runs Dover's communication technologies segment.
Goldman Sachs & Co is financial adviser to Dover, and
Skadden, Arps, Slate, Meagher & Flom LLP is the legal adviser.
Dover's shares, were up 5 percent at $80.08 on the New York
Stock Exchange at midday. The stock had risen about 16 percent
this year up to Wednesday's close.