Joy Global Inc., a Milwaukee-based mining equipment manufacturer, announced that it has entered into a definitive agreement to acquire LeTourneau Technologies Inc. from Rowan Companies Inc. for $1.1 billion in cash.
LeTourneau designs, builds and supports equipment for the mining and oil and gas drilling industries, and has been a leader in the earthmoving equipment industry since the 1920s.
The transaction has been approved by both companies’ boards of directors. Completion of the transaction is subject to the receipt of necessary regulatory approvals and other customary closing conditions and is expected to occur within 60 days.
LeTourneau operates two business segments – mining products and drilling products. The mining products business is the world’s leading manufacturer of large wheel loaders for surface mining, providing the industry’s largest model sizes and payload capacities. LeTourneau’s mining products business had calendar 2010 revenue and EBITDA of $259 million and $67 million, respectively.
LeTourneau’s drilling products business is a leading designer of offshore jack-up drilling rigs as well as a manufacturer of the primary components for these rigs.
"This acquisition represents a compelling opportunity for Joy Global Inc. and our shareholders, with strong growth prospects for both the mining products and drilling products business segments," said Joy Global chief executive officer Mike Sutherlin. "The LeTourneau mining products business is a natural fit with our P&H business. It adds another solution for surface loading that complements our electric mining shovels, and gives us access to smaller and non-electrified mines. The drilling products business moves us into another area of resource extraction that has similar fundamentals and value drivers as surface and underground mining, and therefore is a good fit for our business model which focuses on equipment reliability and Life Cycle Management. Oil and gas has been defined as a strategic growth opportunity for a number of years, and LeTourneau gives us a great entry point into this sector. We welcome the LeTourneau team to Joy Global Inc. and look forward to working together to pursue the growth opportunities that come with the combined business."
Randy Baker, president and chief operating officer of P&H Mining Equipment, said, "The addition of LeTourneau’s front-end loaders will enhance our product offering and leverage our existing manufacturing and product distribution networks. We expect a smooth integration since P&H already serves as a dealer for LeTourneau in key geographies around the world.”
