It's time for a confession: I once followed Lone Star Technologies (NYSE:LSS) as an analyst. When touring the company's steel mill in East Texas, I showed up in white trousers. Smart folks don't wear white trousers to a steel mill, so read on at your own risk. 

In very short order, no analysts will cover Lone Star Technologies, per se. On Thursday, it was announced that the Dallas-based maker of oilfield tubular goods would be acquired by U.S. Steel (NYSE:X). I'm biased, but it seems to me a most advantageous acquisition for the nation's largest steel producer.

It appears that U.S. Steel will pay $67.50 per share, or a total of $2.1 billion, for Lone Star. The former figure represents a 39% premium above the $48.45 at which Lone Star closed Wednesday. Once the proposed transaction was announced, Lone Star shares climbed to a close of $66.11 on Thursday.

Significant portions of Lone Star's tubular goods are "seamless," meaning that they're ideal for deep water and other challenging drilling conditions. According to U.S. Steel Chairman and CEO John Surma, Lone Star is also extending its global reach through a pending joint venture in China and an existing one in Brazil. Discussions are also underway with an company headquartered in India.

The deal, which includes a breakup fee of $59 million, is expected to close later this year. U.S. Steel will pay for its acquisition with currently available cash, an existing receivables purchase program, and three new lines of credit.

We know what this proposed transaction means for Lone Star, but what will it do for U.S. Steel? After all, within the past couple of weeks, both Halliburton (NYSE:HAL) and onshore driller Nabors Industries (NYSE:NBR) have warned that slower-than-expected North American drilling activity would negatively affect earnings for the current quarter.

For my money, the folks in Pittsburgh appear to be making a solid purchase. I've known of Lone Star for 20 years, and perhaps it's that fact -- along with my unwavering belief that oilfield activity will jump like the proverbial scalded dog over the next several years -- that leads me to conclude that a purchase price that works out to about 8.5 times expected EBITDA can be nitpicked to death. But it seems it could work out to be a steel -- er, I mean, a steal -- for Surma and his minions.

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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments or questions. The Fool has a strict disclosure policy.