8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+1

DOVER Corp 8-K Report, Material Agreement (May 14, 2018)

Filed May 14, 2018For Securities:DOV

Summary

Dover Corporation (DOV) has filed an 8-K report detailing the completion of its Separation and Distribution Agreement with Apergy Corporation, a former wholly-owned subsidiary. This event, finalized on May 9, 2018, marks Apergy as an independent public company trading under the ticker symbol "APY". Dover shareholders received one share of Apergy common stock for every two shares of Dover common stock they held as of the record date. The filing outlines the key agreements governing this separation, including asset and liability allocation, employee matters, tax responsibilities, and transition services to be provided by Dover to Apergy, ensuring a structured operational handover. The separation involves comprehensive agreements covering the transfer of assets and liabilities exclusively related to the Apergy businesses to Apergy, while Dover retains its own business assets and liabilities. The Tax Matters Agreement is particularly detailed, outlining how pre-Distribution taxes and potential taxes arising from the distribution's tax-free status will be allocated. Apergy is subject to significant covenants for a period post-separation to preserve the tax-free nature of the transaction, including restrictions on stock issuance and business disposals. Dover will provide transition services to Apergy, with fees intended to cover Dover's costs.

Key Highlights

  • 1Dover Corporation completed the spin-off of its subsidiary, Apergy Corporation, on May 9, 2018.
  • 2Apergy is now an independent public company trading on the NYSE under the ticker symbol "APY".
  • 3Dover shareholders received one share of Apergy for every two shares of Dover held.
  • 4Definitive agreements for separation, employee matters, tax, and transition services were executed.
  • 5Assets and liabilities were allocated between Dover and Apergy based on their respective businesses.
  • 6The Tax Matters Agreement details the allocation of pre- and post-distribution tax liabilities, including provisions to maintain tax-free status for the distribution.
  • 7Dover will provide transition services to Apergy for a defined period, with Apergy compensating Dover for these services.

Frequently Asked Questions

The main event is the completion of Dover Corporation's separation and spin-off of its subsidiary, Apergy Corporation. This occurred on May 9, 2018, making Apergy an independent public company.

Dover shareholders received one share of Apergy common stock for every two shares of Dover common stock they owned as of the record date. Fractional shares were handled by selling them and distributing the net proceeds to eligible shareholders.

The key agreements are the Separation and Distribution Agreement (detailing the spin-off and ongoing relationship), the Employee Matters Agreement (addressing employee benefits and equity awards), the Tax Matters Agreement (outlining tax responsibilities and preservation of tax-free status), and the Transition Services Agreement (for post-separation operational support from Dover to Apergy).

Apergy has agreed to significant covenants for two years post-distribution, restricting actions like issuing new stock, ceasing business operations, or disposing of assets in ways that could jeopardize the tax-free status of the separation. Apergy is also liable for taxes if its actions cause the distribution to become taxable.