UPDATE 2-Robbins & Myers to buy T-3 Energy for $422 mln

Wed Oct 6, 2010 11:21am EDT

* To pay $31.80/shr in cash & stock, deal at 17 pct premium

* Deal to boost Robbins & Myers energy business

* Says deal to add to earnings in first full year

* Robbins & Myers' Q4 beats; sees Q1 adj. EPS $0.25-$0.35

* Shares of T-3 Energy up 18 pct, Robbins & Myers flat (Adds details on results, background, share movement)

Oct 6 (Reuters) - Diversified manufacturer Robbins & Myers Inc RBN.N agreed to buy oilfield and pipeline services company T-3 Energy Services TTES.O for $422 million in cash and stock, to boost its presence in the growing energy markets.

Oilfield service providers are enjoying a rise in demand from both offshore and onshore drillers in the wake of the Gulf of Mexico oil spill in April for new equipment and for the servicing of existing equipment.

Robbins & Myers' fluid management group, which provides surface and down-hole pumps and systems, power sections, pipeline closures, has heavy exposure to the drilling business.

The business contributes more than half of Robbins & Myers total revenue and has picked up sharply in the last few quarters and T-3 would help it offer a broader set of products and services to their combined customer base.

Robbins & Myers offered T-3 shareholders $31.80 per share -- $7.95 in cash and 0.894 in stock -- which is a premium of 17 percent to T-3 Energy's closing price on Tuesday.

The offer is, however, about 5 percent below the 52-week high that T-3 Energy shares had touched in June, two months after the oil spill.

Shares of Dayton, Ohio-based Robbins & Myers were trading flat at $26.64 Wednesday morning on the New York Stock Exchange. T-3 Energy shares, which rose as much as 18 percent to $31.10 on Nasdaq, were trading at $31.38.

Q4 BEATS

Robbins & Myers, which also serves the pharmaceutical and industrial markets, reported a better-than-expected rise in fourth-quarter profit on the back of improving energy markets.

The company expects first-quarter profit of 25-35 cents a share, excluding restructuring costs and the impact of the T-3 deal.

In the quarter ended Aug. 31, the fluid management group clocked a 37 percent growth in the quarter and the company expects demand for its energy products to remain robust.

Net income rose to $14.8 million, or 45 cents a share, from $12.8 million, or 39 cents a share, a year ago.

Excluding items, the company earned 53 cents a share, 13 cents above what analysts polled by Thomson Reuters I/B/E/S had expected.

Net sales rose 15 percent to $178.4 million, beating analysts view of $164.1 million.

The company sees fiscal 2011 adjusted revenue of more than $850 million for the combined entity, it said in a regulatory filing.

Robbins & Myers said its expects the deal to add to its earnings during the first full year of ownership, excluding one-time transaction costs.

UBS Securities LLC is acting as financial adviser for Robbins & Myers, while T-3 is advised by Simmons & Company International. (Reporting by Megha Mandavia in Bangalore; Editing by Gopakumar Warrier, Unnikrishnan Nair)

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