BKR Expands Pressure Management Portfolio With $540M CDC Acquisition

Core Insights - Baker Hughes Company (BKR) has announced the acquisition of Continental Disc Corporation (CDC) for $540 million in an all-cash transaction, enhancing its Industrial & Energy Technology segment with a high-margin, safety-critical product portfolio [1][9] Group 1: Acquisition Details - The acquisition of CDC, a leader in pressure management solutions, is expected to add significant recurring revenue, with approximately 80% of CDC's projected $109 million in 2024 revenues being recurring [2][9] - The deal is anticipated to be immediately accretive to Baker Hughes' earnings per share, cash flow per share, and segment margins, complementing existing valve technologies [3][9] Group 2: Strategic Fit and Portfolio Optimization - This acquisition is part of Baker Hughes' broader strategy for portfolio optimization, following recent acquisitions and divestitures aimed at reshaping the company's business mix [4] - CEO Lorenzo Simonelli highlighted that the strategic fit of CDC enhances the industrial portfolio and aims to create long-term shareholder value [4] Group 3: Transaction Timeline and Advisors - The transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals, and is fully funded with cash on hand [5] - Jefferies and King & Spalding are advising Baker Hughes, while William Blair, Baird, and Morrison Foerster are advising CDC and its seller [5] Group 4: Industry Positioning - The acquisition strengthens Baker Hughes' position in industrial process safety and pressure control, which are critical components in the evolving energy and industrial technology landscape [6]