National Oilwell Inc.'s all-cash purchase of Hydralift ASA for $300 million will enhance the company's offshore equipment industry position. National Oilwell, which is offering approximately US$7.33 per Hydralift share, will gain additional capacity for manufacturing drilling equipment, cranes, pipe-handling systems, heave compensation systems, riser tension systems, mooring systems, handling equipment for cable-laying vessels and well-intervention systems. Pete Miller, National Oilwell chairman, president and chief executive officer, says, "We believe Hydralift's product range will open new growing market segments to National Oilwell and benefit our customers' needs for more technical, fully integrated drilling systems." National Oilwell is a big player in most major geographic markets, noted Mark S. Urness of Salomon Smith Barney Inc. Hydralift is as big or bigger in its home territory of the North Sea, and it would bring strength in West Africa and Brazil to the combined company, he says. "Most of [Hydralift's] product lines do not overlap with that of National Oilwell and are complementary," says James Crandell of Lehman Brothers Inc. Urness says, "It's one of those deals that sounds almost too good to be true, because the sellers get a 60% premium and National Oilwell gets 20% earnings accretion, and it adds a significant amount of backlog and new areas of business."
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