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Wednesday, September 7, 2011
Release–Lufkin Industries Announces Acquisition of Quinn's Oilfield Supply and Affiliates
LUFKIN, Texas, Sept. 6, 211–Lufkin Industries, Inc. announced today that it has signed an Asset Purchase Agreement to acquire substantially all of the assets of Quinn's Oilfield Supply Ltd., including certain affiliates ("Quinn's"), for approximately $303 million in cash subject to certain adjustments.
Quinn's, based in Red Deer, Alberta, Canada, is one of the largest reciprocating rod pump manufacturers in North America and, through its acquisition of GrenCo Industries in June 2010, also manufactures and distributes progressive cavity pumps ("PCPs") and related equipment. Founded in 1965, Quinn's operations include two manufacturing facilities in Canada, one in the United States and 51 service locations strategically located in the oil and gas producing areas of North America.
The acquisition is expected to be accretive to Lufkin's earnings in 2012 and is expected to close before the end of 2011, subject to certain closing conditions and regulatory approvals. Financing for this transaction is anticipated to include a combination of borrowings under an expanded revolving credit facility and a senior secured term loan.
John F. "Jay" Glick, president and CEO of Lufkin, stated, "The acquisition of Quinn's continues our strategy of expanding our product portfolio in artificial lift systems, while at the same time extending our sales and service network in the increasingly active oil provinces of the United States and Western Canada. The integration of Lufkin's surface beam pump unit with Quinn's downhole rod pump will enhance Lufkin's ability to package complementary products and allow us to better optimize the rod lift system to the benefit of our customers. Quinn's is well positioned to benefit from the large increase in unconventional oil plays as oil shale wells generally transition to artificial lift approximately 18 to 24 months after completion. Quinn's downhole rod pumps and PCPs are also a clear fit with our Automation strategy of integrating downhole devices and instrumentation to monitor and control production.
Simmons & Company International served as financial advisor to Lufkin Industries, Inc. Wood Roberts, LLC and Infinity Energy Capital, LLC served as financial advisors to Quinn's Oilfield Supply Ltd.
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