Lufkin Industries Acquires North American Rod Lift Business of Schlumberger N.V.

Rhea-AI Summary

Lufkin Industries has successfully acquired the North American Land Rod Lift Business from Schlumberger (NYSE: SLB) as of November 2, 2020. This acquisition enhances Lufkin's product offerings, including downhole pumps and beam pumping units, and consolidates its position in the North American oil market. Lufkin aims to leverage this expansion to provide superior technology and customer service, combining strengths from both companies to benefit clients. The deal is part of KPS Capital Partners' strategy to grow Lufkin despite current market volatility.

Positive

• Acquisition expands Lufkin's product offerings in rod lift solutions.
• Combining Schlumberger's technology and customer base enhances competitiveness.
• Presence in major oil-producing regions, including the Permian Basin, increases market share.

Negative

• None.

Expands Global Platform in Rod Lift Solutions

MISSOURI CITY, Texas, Nov. 2, 2020 /PRNewswire/ -- Lufkin Industries ("Lufkin"), a portfolio company of KPS Capital Partners, LP ("KPS"), announced today that it has completed the acquisition of the North American Land Rod Lift Business (the "Rod Lift Business" or the "Business") of Schlumberger N.V. ("Schlumberger") (NYSE: SLB).

Schlumberger's Rod Lift Business is a large provider of rod lift products and services in North America (onshore) with brands including Don-Nan, Shores Lift Solutions, KBA Engineering, Platinum Pumpjack Services and RLC Rod Lift Consulting.  The Business provides its customers with a full product offering including downhole pumps and accessories, beam pumping units, sucker rods and gas lift products.  The Rod Lift Business has significant manufacturing and distribution capacity and has developed differentiated technology offerings, including the proprietary PumpTrak software.  The Business has an expansive footprint across all major oil-producing regions in North America (onshore), including the Permian Basin where Don-Nan has operated for almost 60 years.

Lufkin became an independent company after being acquired by KPS from Baker Hughes on June 30, 2020.  Lufkin, headquartered in Missouri City, Texas, is a leading global provider of rod lift products, technologies, services and solutions, including automated control and optimization equipment and software for rod lift equipment to the oil and gas industry.  With over 100 years of industry leadership, Lufkin manufactures a complete line of surface pumping units, downhole sucker rod pumps and automation systems in six manufacturing and assembly facilities worldwide.  Lufkin has an extensive global service footprint that operates throughout the oil-producing world.

Michael Psaros, Co-Founder and Co-Managing Partner of KPS, said, "We are excited to combine Lufkin and Schlumberger's Rod Lift Business, which together have an unparalleled reputation for reliability, superior technology, innovation, customer service and global footprint.  KPS Partner Ryan Baker, leveraging KPS' significant capital resources and global platform, is successfully leading a team that is building Lufkin through the acquisition of complementary businesses, technologies and products that serve the upstream sector of the energy business.  KPS is committed to expanding the Lufkin platform despite unprecedented volatility in the energy business, which will benefit customers of Lufkin and Schlumberger's Rod Lift Business."

Andy Cordova, President of Lufkin, said, "The real winner in the combination are the customers of Lufkin and Schlumberger's Rod Lift Business.  Our customers will now have access to the many strengths of both businesses as we combine the very best technology, manufacturing processes and global footprint.  We will remain laser focused on providing world-class quality, delivery and customer service across our platform as we combine these businesses and beyond."

Simmons Energy, a division of Piper Sandler & Co., acted as advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Dentons served as legal counsel to Lufkin and its affiliates.  PPHB LP acted as advisor and Akin Gump Strauss Hauer & Feld LLP served as legal counsel to Schlumberger.

About Schlumberger Rod Lift Business
Schlumberger's Rod Lift Business is a large provider of rod lift products and services in North America (onshore) with brands including Don-Nan, Shores Lift Solutions, KBA Engineering, Platinum Pumpjack Services and RLC Rod Lift Consulting.  The Business provides its customers with a full product offering including downhole pumps and accessories, beam pumping units, sucker rods and gas lift products.  The Rod Lift Business has significant manufacturing and distribution capacity and has developed differentiated technology offerings, including the proprietary PumpTrak software.  The Business has an expansive footprint across all major oil-producing regions in North America (onshore), including the Permian Basin where Don-Nan has operated for almost 60 years.  For more information on Schlumberger's Rod Lift Business, visit www.don-nan.com or www.slb.com/completions/artificial-lift/sucker-rod-pumps.

About Lufkin Industries
Lufkin, headquartered in Missouri City, Texas, is a leading global provider of rod lift products, technologies, services and solutions, including automated control and optimization equipment and software for rod lift equipment to the oil and gas industry.  With over 100 years of industry leadership, Lufkin manufactures a complete line of surface pumping units, downhole sucker rod pumps and automation systems in six manufacturing and assembly facilities worldwide.  Lufkin has an extensive global service footprint that operates throughout the oil-producing world.  For more information on Lufkin, visit www.lufkin.com.

About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $11.5 billion of assets under management (as of June 30, 2020).  For over two decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing.  KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage.  The KPS Funds' portfolio companies currently have aggregate annual revenues of approximately $10.6 billion, operate 168 manufacturing facilities in 27 countries, and have nearly 32,000 employees, directly and through joint ventures worldwide (as of June 30, 2020, pro forma for recent acquisitions).  The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.

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SOURCE Lufkin Industries

FAQ

What is the recent acquisition by Lufkin Industries related to Schlumberger (SLB)?

Lufkin Industries acquired Schlumberger's North American Land Rod Lift Business, enhancing its product offerings and market presence.

How will Lufkin's acquisition of Schlumberger's Rod Lift Business impact SLB shareholders?

The acquisition allows Lufkin to enhance its operations, but it does not directly impact Schlumberger's shareholders as it’s a divestiture.

What products are included in the Rod Lift Business acquired from Schlumberger (SLB)?

The Rod Lift Business includes downhole pumps, beam pumping units, sucker rods, and gas lift products.

When did Lufkin acquire Schlumberger's Rod Lift Business?

The acquisition was completed on November 2, 2020.

What technology does the Rod Lift Business offer?

The Rod Lift Business includes proprietary technologies such as PumpTrak software.