Fitch rates Dover notes A-

Fitch Ratings said it assigned a rating of A- to Dover Corp.'s €600 million issue of 1.25% senior unsecured notes.

The proceeds from the issuance will be used for general corporate purposes, which may include repayment of commercial paper or the payment of a portion of the $780 million acquisition of Wayne Fueling Systems Ltd., which is expected to close in the first quarter of 2017.

The company also has a long-term issuer default rating of A- and short-term issuer default rating of F2.

The outlook is negative.

The Wayne acquisition will strengthen Dover's retail fueling business, adding a business with a global presence and significant exposure to North America, Fitch said.

The Wayne business complements Dover's Tokheim business, which was acquired in January 2016 for $436 million, the agency noted, and offers similar products primarily to the European market.

Fitch also said it expects that acquisition debt, together with weak trends in Dover's continuing business, will push Dover's debt-to-EBITDA ratio to about 2.7x at the end of 2016 from 2.2x at the end of 2015.

The negative outlook considers the potential that leverage may be sustained higher than 2x for an extended period due to Dover's soft operating results and its ongoing acquisition activity, the agency said.

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