Lufkin Industries Inc. has agreed to buy substantially all of Quinn's Oilfield Supply Ltd. for $303 million in cash. Quinn’s, of Red Deer, Alb., manufacturers specialty oilfield pumps, and is among the largest North American producers of reciprocating rod pumps, progressive cavity pumps (PCPs), and related equipment. It operates two plants in Canada and one in the U.S., and it has more than 50 service locations for oil-and-gas operations across North America.
"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,” stated Lufkin president and CEO Jay Glick.
Quinn’s entered the PCPs market by its acquisition of GrenCo Industries in June 2010.
Lufkin is a ferrous foundry, but also a manufacturer of oilfield pumping units, well automation systems, gas lift and plunger lift systems, and power transmission products.
The sale is outlined in an asset purchase agreement, but it remains subject to certain adjustments. Lufkin reported the sale will close by year’s end.
Glick said integrating Lufkin's surface beam pump unit with Quinn's downhole rod pump will allow Lufkin to package complementary products, and optimize rod lift systems better to customers’ benefit. “Quinn's is well positioned to benefit from the large increase in unconventional oil plays,” he said, “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.
"Quinn's business model relies on product and service customization and adaptability while GrenCo manufactures a proprietary line of PCP equipment and is believed to have the premium wellhead drive offering in the industry,” continued Glick. “The PCP market is expected to post strong growth going forward as PCPs are particularly well suited to the heavy oil production applications.