In a move aimed at bolstering its energy division, General Electric announced Monday that it has agreed to acquire Lufkin Industries—a Texas-based provider of artificial lift technologies for the oil and gas industry—for $3.3 billion.
Terms of the transaction—which is expected to close in the second half of 2013, pending shareholder and regulatory approval—call for GE to pay $88.50 in cash for each Lufkin share, a 38 percent premium over the closing price of the target company’s stock as of Friday.
GE said in its press release announcing the acquisition that the addition of Lufkin will allow it to better serve customers at all stages of production. The Texas company already supplies GE with artificial lifts, which are now used in 94 percent of the world’s 1 million oil-producing wells. “Advanced technologies, combined with new drilling practices, are revolutionizing the oil and gas industry,” GE oil & gas president and CEO Daniel Heintzelman said in a statement included in the release.
The Lufkin acquisition is the latest in a series of deals GE has struck to expand its oil and gas unit, the company’s fastest-growing division. GE’s recent energy-related transactions include its acquisition of oil services company John Wood Group’s well-support division for $2.8 billion in 2011. While Allen & Overy advised GE in connection with that deal, the company turned to longtime counsel Weil, Gotshal & Manges as its lead legal adviser on the Lufkin acquisition.
The Weil team is being led by corporate partners R. Jay Tabor in Dallas and Danielle Do in New York. Other Weil corporate partners working on the matter include P.J. Himelfarb in Dallas and Howard Chatzinoff in New York. (Chatzinoff recently led the Weil team that represented GE in connection with the sale of its remaining holdings in NBCUniversal to Comcast for $16.7 billion.)
Weil’s deal team on the transaction also includes partners Kimberly Blanchard and Chayim Neubort, who are advising on tax issues; Michael Kam, on employee benefit issues; Samuel Zylberberg, on real estate–related issues; and Charan Sandhu, on technology and intellectual property issues. Environmental partner David Berz and regulatory partners Charles Roh and Steven Tyrrell, all of whom are based in the firm’s Washington, D.C., office, are also part of the team.
The Weil associates worked on the matter: Jennifer Britz, Elliott DeRemer, Mark Dundon, Courtney Fain, Marisa Geiger, John Goldman, Adé Heyliger, Joanna Jia, Bianca Levin-Soler, Matthew Morton, Henry Neading, Eric Remijan, Monty Ward, Timothy Welch, and Janell Wise.
In addition to advising GE on its deal with Comcast in February, Weil also represented the company when it sold a controlling stake in NBCU to Comcast in 2009 for $30 million. Other transactions in which the firm has represented GE or its affiliates include the $2.51 billion sale last year of GE Capital’s property lending unit to EverBank Financial and a $1.3 billion joint venture agreement between GE Aviation and Aviation Industry Corporation of China in 2011.
Brackett B. Denniston III serves as GE’s senior vice president, secretary, and general counsel.
For its part, Lufkin turned to Bracewell & Giuliani to represent it on its sale to GE. A Bracewell spokeswoman said that while the firm has done work for Lufkin in the past, this was the first M&A deal on which had worked with the company. The Bracewell team working on the matter is being led by Houston-based partners Gary Orloff and Michael Telle, both whom focus their practice on energy and corporate securities matters.
Other Bracewell partners working on the deal include Lance Behnke in Seattle, Robert Nichols in Houston, and Bruce Jocz in New York, all of whom are advising on tax and labor employment issues. Tim Wilkins, managing partner of the firm’s Austin office and head of Bracewell’s environmental and natural resources practice, is handling environmental issues, while partners Daniel Hemli and Daniel Witschey are dealing with antitrust and related issues.
Senior counsel Scott Sherman in Houston and Josh Zive in Washington, D.C., are also working on environmental issues. The Bracewell associates working on the matter are Elizabeth Brummett Behncke, Harrison Bolling, Clay Brett, Marcus Friedman, Erica Hogan, Rebecca Keep, Benjamin Martin, Allison Perry, Zackary Ring, Glenn Strapp, and Caroline Wells.
Alejandro Cestero, who did stints at both Bracewell and Vinson & Elkins earlier in this careers, serves as Lufkin’s vice president, secretary, and general counsel.