Joy global announced today that it has entered an agreement to acquire 100 % ownership of LeTourneau Technologies Inc. from Rowan companies, Inc. for $1.1 Billion in cash. LeTourneau designs, builds and supports equipment for mining and oil and gas drilling industries. The completion of the transactions is expected to occur within 60 days.
LeTourneau operates from two business segments-Mining and drilling products. The Mining business is the world’s leading manufacturer of large wheel loaders for surface mining. The Mining products segment produced $259 million and $67 million of 2010 revenue and EBITDA, respectively. The drilling products business is a leader in designing of offshore jack-up drilling rigs as well as manufacturing the primary components for these rigs. The drilling products had 2010 revenues and EBITDA of $556 million and $38 million, respectively.
President and Chief Executive Mike Sutherlin foresee this acquisition as a ‘natural fit’ for their P&H business. LeTourneau expects growth in the mining business and as the only manufacturer of electric drive loaders and has the most extensive and largest sizes of wheel loaders in the mining industry.
At 1:40p.m Joy Global is selling at 89.77(+2.24, 2.56%) after the company announced this acquisition.
Key Terms (brief descriptions):
Jack Up Rigs: A jack-up rig is a type of mobile platform that is able to stand still on the sea floor, resting on a number of supporting legs
Wheel Loader: Used for loading excavated earth and rocks, ranging from small wheel loaders for civil engineering to super-large ones for mining.
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