LeTourneau facilities being sold 2nd time in year

Published 12:04 pm Friday, September 2, 2011

LeTourneau Technologies’ facilities in Vicksburg and Houston might change hands for the second time this year, as Joy Global announced Thursday it is selling drilling products operations at both facilities to Houston-based oil services firm Cameron International Corp. for $375 million in cash.

Both companies outlined the pending deal in filings with the Securities and Exchange Commission, a transaction that already has gained unanimous approval of both firms’ governing boards, according to published reports. The deal should close within 60 days, the company said.

Joy, a mining services company, will retain a LeTourneau facility in Longview, Texas, where large-capacity wheel loaders are made for surface mining. In June, Joy closed on a $1.1 billion deal with Houston-based Rowan Companies for all of LeTourneau’s operations.

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Cameron, a provider of flow equipment products, systems and services to oil, gas and process industries worldwide, expects to carry the purchase on its 2012 earnings and Joy expects the sale to expand ways to fund its planned acquisition of China-based International Mining Machinery Holdings Ltd., according to Zacks Investment Service. The firm traces its corporate roots to 1833, employs more than 18,000 worldwide and boasts $5 billion in annual revenues, according to its website.

The pending transfers follow the departure early this week of the $150 million Joe Douglas jackup oil drilling rig from the south Warren County fabrication yard on the Mississippi River — a send-off believed to be a sign of change at the plant, which dates to 1944, when industrialist R.G. LeTourneau started a riverside munitions plant there.

It also comes after Louisiana Gov. Bobby Jindal announced a $32 million redevelopment of the former Northrop Grumman plant at the Madison Parish Port, north of Tallulah and about 30 miles northwest of Vicksburg.

The deal appears to keep oil and gas exploration the driving force of the plant’s operations, though company officials made no public statements on what the size of the work force will be once the transfer is complete or whether full-scale rig construction will continue. Welders might benefit, as the plant could hire more of them to supplement labor forces. Shortly after it purchased the local yard, Joy officials said a work force of about 250 was planned, less than the 600 or so working there in recent years under Rowan Companies, which had owned the plant since 1994.

“The addition of LeTourneau’s portfolio of drilling equipment and rig components adds to our existing products offering and enhances the growth opportunities for our drilling systems platform,” Cameron chairman and CEO Jack Moore said in a statement. “We welcome the LeTourneau team to the Cameron family and look forward to providing our customers and theirs with a greater suite of products and services.”

Rig kits, consisting of leg assembly pieces and other parts, figure to stay in the mix of major projects at LeTourneau. Kits and licenses for two mobile jackups were to be furnished by LeTourneau for Singapore-based KS Drilling Pte. Ltd. and built in full by Chinese shipbuilder COSCO Shipyard Co. by 2014.

Both the pending LeTourneau transfer and proposed improvements in Tallulah were expected to have effects on job bases on both sides of river. Unemployment rates for July were 12 percent in Madison Parish and 11.7 percent in Warren County.

St. John’s Enterprises, a barge manufacturer based in Garyville, La., plans to hire 104 people within a year and 454 by 2016. A tax incentive package from the State of Louisiana includes a $1.4 million performance-based grant that holds if workers average more than $40,000 in annual pay and benefits.