Joy closes LeTourneau acquisition

EQUIPMENT manufacturer Joy Global has completed its $US1.1 billion cash deal with Rowan Companies for the acquisition of mining and drilling equipment maker LeTourneau Technologies.
Joy closes LeTourneau acquisition Joy closes LeTourneau acquisition Joy closes LeTourneau acquisition Joy closes LeTourneau acquisition Joy closes LeTourneau acquisition

Joy Global CEO Mike Sutherlin.

Donna Schmidt

The OEM initially announced the takeover in mid-May. LeTourneau’s mining products business is now integrated with Joy Global’s P&H Mining Equipment segment.

"The acquisition of LeTourneau brings two very strong business platforms to Joy Global,” Joy Global chief executive officer Michael Sutherlin said.

“LeTourneau's wheel loaders are the largest and most fuel efficient in the industry and their complementary application to our electric mining shovels will deliver significant synergies.

“LeTourneau is also a leading brand in oil and gas drilling rig equipment and design and this business is leveraged to an emerging demand for higher specification rigs.”

LeTourneau, which has manufactured large capacity wheel loaders for the surface mining market as well as jack-up rigs and other ancillary equipment for nearly a century, said last month it was well positioned to grow its mining business as mine expansion continued.

“[Ours] are the only wheel loaders with installed power greater than 2000 gross horsepower rating, and the only wheel loaders capable of loading 400 ton haul trucks,” the company said.

P&H Mining president Randy Baker also said at the time the two expected a smooth integration of LeTourneau with its surface business because of an existing relationship where P&H had served as a dealer in some of the company’s key geographies worldwide.

“The addition of LeTourneau's front-end loaders will enhance our product offering and leverage our existing manufacturing and product distribution networks,” he said.

“LeTourneau's electric drive technology is more efficient than mechanical drive systems, which has resulted in strong order growth.

“We believe that the LeTourneau business gives us the opportunity to further build on our Life Cycle Management strategy by adding a complementary product range that brings volume and scope to our aftermarket business.”

LeTourneau's calendar 2010 financial results reflected $815 million in revenues.

Joy Global said in May it estimated $40 million in synergies by 2013 as a result of manufacturing and supply chain efficiencies across both segments as well as the integration of the aftermarket mining infrastructure.

Joy Global expects the acquisition to be earnings accretive in fiscal 2011, excluding deal costs and charges.

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