Cameron to Buy TTS Energy Biz - Analyst Blog

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Cameron International Corp. ( CAM ) is set to take over TTS Energy Division from TTS Group ASA for a cash payment of $270 million.

The TTS Energy Division is engaged with the supply of high quality drilling equipment, rig packages and rig solutions for both jackup and onshore rigs to customers across the globe.

The division's products comprise drilling rig control systems, top drives, traveling blocks, automated pipe handling along with iron rough necks, drawworks, derrick structures, drill floor tools, fingerboards, blowout preventer (BOP) handling equipment, deadline anchors, and drill line spoolers. 

Pending customary review and approval by the Norwegian Competition Authorities, the transaction is slated to be completed by mid-2012.

This deal follows Cameron's acquisition of LeTourneau Technologies from Joy Global Inc. ( JOY ) in August, last year. The purchase of TTS Energy Division will enhance Cameron's portfolio of products and service offerings.

Houston, Texas-based Cameron is a leading manufacturer of pressure control equipment used in onshore, offshore, and subsea applications for oil and gas drilling, production, and transmission. The company operates through three segments: Drilling & Production Systems; Valves & Measurement; and Process & Compression Systems.

We believe Cameron is well positioned going forward given its dominant market share, technological leadership, efficient execution skills and backlog of nearly $6 billion. The increase in North American drilling activity, along with potential opportunities from the industry complying with new pressure control equipment rules, has added to this bullish sentiment.

However, shares of the company are fairly valued at current levels, considering the sensitivity of Cameron's business to gas/oil price volatility, as well as exploration and production spending patterns, costs, geo-political risks, competition and the advent of new technologies.

Cameron currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Longer-term, we are maintaining our Neutral recommendation on the stock.


 
CAMERON INTL ( CAM ): Free Stock Analysis Report
 
JOY GLOBAL INC ( JOY ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CAM , JOY

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