You’re forgiven if Lufkin Industries, a small, Texas-based oilfield services company, isn’t immediately familiar. It’s bit more now undoubtedly since General Electric says it will buy Lufkin for $3.3 billion. So, what is GE putting billions of dollars into? Lufkin manufactures pumps and lifts designed to help extract natural gas and oil from hard-to-reach reservoirs. It also runs a foundry and makes industrial gear boxes. Lufkin’s roots extend back a century, to 1902, when the company was founded to make railroad and sawmill equipment. The company has made four acquisitions of its own in the past five years, adding (even) smaller businesses that also produce lifts. Lufkin competes with other oilfield services companies like Baker Hughes, Cameron Corp. and FMC Technologies. Here’s a snapshot of Lufkin’s (market cap: $2.2 billion) financials: It earned $81.9 million, $2.45 a share, on $1.2 billion in sales last year. That’s significant top-line (37.5%) and bottom-line (18.5%) growth. Pretty much the way Lufkin has trended for a decade. In 2003, for perspective, Lufkin made just $10 million, 36 cents a share, on $262 million in sales. Most of the growth was self- financed, but Lufkin did issue $330 million in long- term debt last year, putting its debt-to-equity ratio at the industry average of 0.4 times. Lufkin shares have risen more than 1,200% in a decade, to Friday’s closing price of $63.93. Clearly a beneficiary of expanding shale gas production in the United States. GE’s bid values the company at $88.50 a share, a healthy premium. (Lufkin shares in early morning trading promptly rose 37.9% to $ 88.12.) Certainly there’s nothing paltry about the buyout sum. The deal fetches a enterprise value/ EBITDA multiple of 13.5 times. Somewhat high. “The multiple paid for Lufkin appears to reflect a bet that the surge in oil and drilling within North America will continue and/or shale oil development abroad will soon take off,” Sanford C. Bernstein analyst Steven Winoker wrote in a client note this morning. Winoke, who rates the shares as Market Perform, is skeptical. Shale production in the U.S. should continue, he says, but at a reduced pace from the last three years. Some of the most lucrative deposits have been tapped, and new discoveries haven’t been as attractive. GE says its oil and gas business is its fastest growing unit, and CEO Jeffrey Immelt just last week voiced a strongly bullish sentiment on shale gas’ prospects when he announced a new natural gas-focused research center in Oklahoma City. ” The availability of shale in the United States and around the world has to be one of the biggest game-changers I’ve seen in my career. The question is can we tap it? Can we develop the technologies to extract it sustainably? If we do, we’ll have cheaper energy.” If we do, GE will be making (even) more money. The massive conglomerate (market cap: $238 billion) earned $ 13.6 billion, $1.29 a share, on $147.4 billion in sales last year. Its shares were little changed after this morning’s news. A last tid-bit. Even after buying Lufkin, GE will still have more than $120 billion in cash, more than half the conglomerate’s market value.