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Joy Global to acquire mining equipment manufacturer LeTourneau for $1.1 billion

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Joy Global to acquire mining equipment manufacturer LeTourneau for $1.1 billion

2011-05-16 20:07:54 GMT+7 (ICT)

MILWAUKEE, WISCONSIN (BNO NEWS) -- International mining company Joy Global Inc. on Monday announced that it had entered into a definitive agreement to acquire LeTourneau Technologies Inc., a mining equipment manufacturer, from Rowan Companies, Inc. for $1.1 billion in cash.

The transaction has been approved by both companies' boards of directors, but completion of the transaction is subject to the receipt of necessary regulatory approvals and other customary closing conditions, which is expected to occur within 60 days.

LeTourneau mining products businesses had calendar 2010 revenue of $259 million and EBITDA of $67 million, as it manufactures large wheel loaders for surface mining, providing the industry's largest model sizes and payload capacities.

Meanwhile, LeTourneau's drilling products business had calendar 2010 revenue and adjusted EBITDA of $556 million and $38 million, respectively.

With LeTourneau's calendar 2010 financial revenues of $815 million and Adjusted EBITDA of $105 million, the acquisition is expected to give Joy Global growth and operating leverage opportunities. However, the company also estimates $40 million in synergies, achievable by 2013, as a result of manufacturing and supply chain efficiencies across both segments and the integration of aftermarket infrastructure in mining.

Experts see Joy Global's acquisition as a response of Caterpillar Inc.'s (CAT) late 2010 $7.6 billion acquisition of Bucyrus International Inc.

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-- © BNO News All rights reserved 2011-05-16

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