Cameron To Acquire TTS’ Drilling Equipment Biz For $270M

Cameron International Corp. (NYSE: CAM), a provider of flow equipment products, systems and services to the energy industry, has reached a deal to acquire Bergen, Norway-based TTS Group ASA's (OSE:TTS) drilling equipment business for $270 million plus additional payments for three years based on their revenues.

The all-cash deal, subject to approval from Norwegian authorities, is expected to close mid 2012.

The businesses Houston-based Cameron will acquire include rig control systems, top drives, traveling blocks, automated pipe handling, iron rough necks, drawworks, derrick structures, drill floor tools, fingerboards, BOP handling equipment, deadline anchors and drill line spoolers.

These additions will complement its earlier acquisition of LeTourneau Technologies, which also makes drilling equipment, and enhance growth opportunities for its drilling systems platform, said Jack Moore, CEO of Cameron.

Johannes D. Neteland, CEO of TTS, thinks Cameron will be good owners of its divested drilling businesses.

The offshore industry is moving towards larger, more integrated units, offering a broader scope of services. Cameron, with its global sale- and service network, will be a good owner and is in a better position to further develop our drilling equipment business, he said.

Neteland said the sale made sense for his company from a financial sense.

Goeran Andreassen, an analyst at RS Platou Markets AS, told Bloomberg News that the price paid in the deal represents a 70 percent premium relative to implicit pricing of that part of [TTS'] business.

The move also allows TTS to focus further on growth and development in other areas, including its shipping business.

Shares of Cameron fell 0.34 percent on Wednesday while shares of TTS closed up 20.81 percent.