What happened

Depending on what numbers or charts you're viewing, it might appear that Dover Corporation (NYSE:DOV), an industrial conglomerate operating in multiple business segments, has shed roughly 18% of its value overnight. But fear not, Dover merely completed the spinoff of Apergy (NYSE:APY).

So what

At 12:01 a.m. EDT, Dover shareholders were distributed one share of Apergy Corporation for every two shares of Dover stock they held as of 5 p.m. EDT April 30, 2018. Dover will receive a one-time cash payment of $700 million from Apergy with the completion of the spinoff -- for more information on how spinoffs alter stock prices, check this out.

"Today marks the beginning of an exciting new chapter for Apergy," said President and Chief Executive Officer Sivasankaran "Soma" Somasundaram in a press release. "As an independent public company with industry-leading technologies and brands, Apergy is well positioned to pursue strategies that are specific to the drilling and production sectors, and accelerate value creation for both our customers and shareholders."

A person pulling a gasoline pump handle out of a gas pump.

Image source: Getty Images.

Now what

The spin-off will create a more stable remaining business at Dover as it removes the more volatile and leveraged part of its business. Removing that uncertainty, which dragged on its top and bottom lines during bad times, could unlock higher price-to-earnings multiples for the company and improve shareholder value.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.