Lufkin Expands Down-Hole Services With Zenith Oilfield Acquisition

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$126.6MM
Description

Acquired oilfield service company providing monitoring & analysis service to down-hole data and related completion products for international oilfield artificial lift market.

Lufkin Industries Holdings UK Ltd., a subsidiary of Lufkin Industries Inc., Lufkin, Texas, (Nasdaq: LUFK) has acquired Aberdeen, U.K.-based Zenith Oilfield Technology Ltd. for approximately US$126.6 million (80.7 million pounds Sterling) in cash.

Zenith provides technology and products for the monitoring and analysis of down-hole data and related completion products for the international oilfield artificial lift market. Zenith was founded in 2004 and services a diversified customer base, including independent and national oil companies in approximately 30 countries.

Zenith is focused on two core segments. The first segment is down-hole monitoring, data gathering and control systems, providing gauges for all types of artificial lift applications, real-time optimization and control devices specifically for electric submersible pumps (ESPs) and progressing cavity pumps (PCPs), and quartz sensors for permanent reservoir monitoring. The second segment is artificial lift completion systems for ESP pump systems, providing pump bypass systems, auto-flow valves that increase the life of the pump, and custom completion design, services and training for E&P customers.

Lufkin president and chief executive John F. “Jay” Glick says, “The acquisition of Zenith is a strong complement to our fast-growing automation business and accelerates our strategic goal of offering our customers a fully-integrated solutions package of well automation capabilities to enhance the effectiveness of our artificial lift products.”

He adds, “This latest acquisition gives Lufkin a complete closed system offering of all the surface and subsurface artificial lift equipment and technology (with the exception of the down-hole rod string) needed to efficiently and cost-effectively produce an oil or gas well.”

Since roughly 70% Zenith's revenues are from the Middle East and Far East, Glick says Lufkin expects this acquisition will help the company gain a foothold in several important international markets Lukin has targeted for entry or expansion for its entire artificial lift portfolio.

Barclays Capital was financial advisor to Lufkin. Simmons & Co. International was financial advisor to Zenith.