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HOUSTON/LONDON - Baker Hughes (NASDAQ:BKR), the $38.7 billion energy technology company with a perfect InvestingPro Piotroski Score of 9, announced Monday it has agreed to acquire Continental Disc Corporation (CDC), a provider of safety-critical pressure management solutions, for approximately $540 million in an all-cash transaction from investment partnerships managed by Tinicum Incorporated.
Missouri-based CDC manufactures rupture discs, pressure and vacuum relief valves, and related safety products used across pharmaceutical, chemical, food and beverage, oil and gas, and aerospace industries. The company generated $109 million in proforma revenue in 2024, with approximately 80% classified as recurring revenue. According to InvestingPro data, Baker Hughes operates with a moderate debt level and maintains a healthy current ratio of 1.34, positioning it well for strategic acquisitions.
The acquisition complements Baker Hughes’ existing Control Valve and High-Pressure Relief Valve offerings within its Industrial & Energy Technology (IET) segment. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals.
"We are excited to enhance our industrial portfolio and expand our addressable market with the addition of CDC’s well-established critical pressure management solutions," said Lorenzo Simonelli, Baker Hughes Chairman and CEO.
This acquisition follows Baker Hughes’ recently announced Surface Pressure Control transaction and sale of its Precision Sensors & Instrumentation product line, advancing the company’s portfolio optimization strategy.
Michael Donner, Partner of Tinicum, said, "We are confident that Baker Hughes will bring exciting new growth opportunities to the business and its team, given Baker Hughes’ highly complementary product lines and global reach."
The transaction will be funded with cash on hand and is expected to be immediately accretive to earnings and cash flow per share, as well as to IET’s segment margins, according to the company’s press release statement. With Baker Hughes currently trading below its InvestingPro Fair Value and showing strong financial performance with $27.8 billion in revenue over the last twelve months, this strategic move could further enhance shareholder value.
In other recent news, Baker Hughes has announced several significant developments. The company has sold its PSI product line to Crane Company for $1.15 billion, a move expected to enhance Baker Hughes’ profit margins as it aims for a 20% EBITDA margin. This divestiture aligns with Baker Hughes’ strategy to streamline operations and focus on more profitable segments. Meanwhile, UBS has maintained a Neutral rating on Baker Hughes with a price target of $40, indicating no change in outlook following the sale. Additionally, Baker Hughes has entered into a joint venture with Cactus Companies, where Cactus will acquire a 65% controlling interest in Baker Hughes’ Surface Pressure Control business for $344.5 million. This transaction, valued at $530 million on a cash-free, debt-free basis, will see Baker Hughes retain a 35% stake. Cactus plans to finance the acquisition using cash reserves and a revolving credit facility, with the deal expected to close in the second half of 2025. These strategic moves are part of Baker Hughes’ ongoing efforts to optimize its portfolio and focus on core growth areas.
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