Dover announced that its Board of Directors has unanimously approved a plan to spin off certain of its communication technologies businesses into a standalone, publicly traded company.

Upon completion of the spin off, the new company, Knowles Corp. (“Knowles”), will be an independent, global technology and market leader in the communication technologies space. Knowles will have significant product breadth in acoustic components, including MEMs microphones, speakers, receivers and transducers, as well as a solid position in communication infrastructure components.

Dover also announced that Jeffrey Niew will serve as president & chief executive officer of Knowles upon completion of the transaction. Niew currently serves as president and chief executive officer of Dover’s Communication Technologies segment.

Robert A. Livingston, Dover’s president and chief executive officer, said, “Consistent with our strategy to create value by identifying and building leading brands and positions in growth markets, we have successfully built Knowles into a great business and an industry-leading enterprise. Given the evolution of their unique business model, these businesses can now pursue a more aggressive growth strategy together as a standalone company. Knowles will have the expertise, solid financial profile and operational flexibility to serve its global base of customers and their distinct product and technology needs. We expect this transaction will provide significant benefits for employees, customers and shareholders.”

He continued, “Knowles has a long track record of success. I am confident that with the continued momentum in this business, in particular the significant growth in the handset market, and the strength of the management team, the Knowles businesses will continue to build on their success as an independent company. This transaction will provide both Knowles and Dover greater flexibility to focus on and pursue their respective growth strategies, which will allow them to create significant value for shareholders.

“Dover will continue to execute on its long-term strategy and commitment to industry leadership through innovation, leveraging its scale and focusing on its key end-markets. In addition to ongoing investments to support organic growth and value-added strategic acquisitions, we will continue our practice of consistently returning capital to our shareholders through dividends and share repurchases, including completion of our current $1 billion authorization.”

Knowles, on a pro-forma basis for 2013, will have $1.3 billion in annual revenue, with about two-thirds derived from high-growth acoustic products. Prominent brands within the new company will include Knowles, Sound Solutions, Dielectric, Novacap, Syfer and Vectron. Knowles is expected to have a capital structure, balance sheet and financial policies consistent with investment grade credit metrics.

Upon completion of this transaction, Dover’s annual revenue, on a pro-forma basis for 2013, will be approximately $7.4 to $7.6 billion. Dover will have leading positions in its growth spaces, namely energy, refrigeration, fluids, and printing & identification, and will remain focused on the ongoing objective of generating consistent revenue and earnings growth, and strong free cash flow.

Transaction Details

Dover anticipates that the transaction will be in the form of a distribution of 100% of the stock of Knowles, a new, independent, publicly traded company, which will be tax-free to Dover and U.S. shareholders. Dover currently expects that the transaction will be completed early next year. One-time costs associated with the transaction are expected to be in the range of $60 to $70 million.

Completion of the transaction is subject to certain customary conditions, including, among others, assurance that the spin off of Knowles will be tax free to Dover and U.S. shareholders, the effectiveness of appropriate filings with the U.S. Securities and Exchange Commission, and final approval by Dover's Board of Directors.