This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

GE to Buy Lufkin Industries in $3.3B Cash Deal (Update 4)

Stocks in this article: GE LUFK SLB

Updated from 1:38 p.m. ET, with comments from Jim Cramer and Credit Suisse analyst Julian Mitchell, market close information, expectations for GE's first-quarter results, as well as GE's updated stock valuation and performance.

NEW YORK ( TheStreet) -- General Electric (GE) on Monday announced an agreement to purchase Lufkin Industries (LUFK) in a cash deal valued at $3.3 billion.

Lufkin's shareholders will receive $88.50 share, or a 38% premium over the target company's closing share price of $63.93 on Friday. The deal is expected to be completed in the second half of 2013.

General Electric's shares rose 1% to close at $23.12. Shares of Lufkin rose nearly 38% to close at $87.96, which was hardly surprising, but was still slightly lower than the takeout price.

Lufkin is based in Lufkin, Texas, and manufactures artificial lift equipment that improves the efficiency of oil wells, and also makes gearboxes used for power transmission. The company's revenue totaled $1.281 billion in 2012, increasing from $932 million in 2011. The company's net earnings during 2012 were $81.9 million, or $2.45 a share, increasing from $70 million, or $2.14 a share, the previous year.

According to the companies' joint press release, Lufkin operates "a global network of more than 110 service centers and nine manufacturing facilities," employing 4,500 people in more than 40 countries.

GE's oil & gas segment had total revenue of $15.24 billion in 2012, increasing from $13.61 billion in 2011. The segment's 2012 profit was $1.92 billion, growing from $1.66 billion the previous year.

"The artificial lift segment is at the heart of critical changes that are helping producers maximize well potential -- which translates into increased output at lower operational cost," said Daniel Heintzelman, CEO of GE's oil & gas segment. Heintzelman added that "Lufkin's world-class people, equipment and services fit perfectly in our portfolio and will enable us to offer a wide range of artificial lift solutions to our customers in this fast-growing artificial lift sector.

"In turbomachinery, Lufkin is already one of our suppliers for turbo gearing and specialty bearings products, and this acquisition allows us to further utilize their technologies and expertise for our customers," Heintzelman said.

GE has plenty of money to fuel acquisitions, $77 billion in cash and cash equivalents as of Dec. 31. Lufkin is the latest in a series of energy infrastructure deals for General Electric, following the acquisitions of Wellstream PLC in February 2011, John Wells Group in April 2011 and Dresser in September 2011.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs