General Electric CEO and Chairman Jeffrey Immelt
General Electric CEO and Chairman Jeffrey Immelt REUTERS

General Electric Company (NYSE: GE) said Monday it will pay about $3.3 billion in cash to buy Lufkin Industries, Inc. (Nasdaq: LUFK), which makes industrial gears and oil field pumps.

The deal for Lufkin, which owns technology for “artificial lift” that energy companies use to bring oil and natural gas to the surface when natural pressure fails to do that, extends GE’s recent moves into the oil and gas business.

GE has expanded its presence in the crude oil and natural gas business lately. In 2011 it bought Dresser Inc., the well support division of John Wood Group PLC and Wellstream PLC.

Artificial lift is used in 94 percent of the roughly 1 million oil-producing wells around the world.

The deal for Lufkin, which is based in Lufkin, Texas, and employs about 4,500 employees in more than 40 countries, is expected to close in the second half of this year.

The purchase price of $88.50 per share or approximately $3.3 billion represents a multiple of about 13.5 times earnings based on 2013 estimated earnings before interest, taxes, depreciation and amortization.

Lufkin has a market capitalization of $2.15 billion.