Rowan Companies Inc. has agreed to sell its LeTourneau Technologies Inc. holding to Joy Global Inc. for $1.1 billion in cash. The deal is still awaiting regulatory approval and is expected to close within 60 days. Rowan provides contract drilling services domestically and internationally, and its LeTourneau subsidiary manufactures drilling, mining, and earthmoving equipment.
LeTourneau’s mining products business is the world's leading manufacturer of large wheel loaders for surface mining, and its drilling products business designs offshore jack-up drilling rigs in addition to manufacturing the primary components for these rigs. It is manufactures drilling equipment for large land and offshore rigs and specialty steel products.
Joy Global is the holding company for Joy Mining Machinery and P&H Mining Equipment, and manufactures equipment used in underground and surface mining.
"We are pleased to enter into this agreement with Joy to monetize our investment in LeTourneau,” Rowan president and CEO Matt Ralls stated. He said the sale is consistent with Rowan’s strategy to sell its non-core businesses, and indicated the revenues will be deployed to the company’s offshore drilling business.
Barclays Capital is acting as financial advisor to Rowan.
"This acquisition represents a compelling opportunity for Joy Global Inc.,” according to president and CEO 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,” Sutherlin continued, “and therefore is a good fit for our business model which focuses on equipment reliability and Life Cycle Management."