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BKR Expands Pressure Management Portfolio With $540M CDC Acquisition
ZACKS· 2025-06-17 13:25
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]
Baker Hughes to Acquire Continental Disc Corporation, a Differentiated Leader in Pressure Management Solutions
Globenewswire· 2025-06-16 12:30
Core Viewpoint - Baker Hughes has agreed to acquire Continental Disc Corporation (CDC) for approximately $540 million in an all-cash transaction, enhancing its portfolio in safety-critical pressure management solutions [1][4]. Company Overview - Baker Hughes is an energy technology company providing solutions to energy and industrial customers globally, with operations in over 120 countries [7]. - Continental Disc Corporation, headquartered in Liberty, Missouri, specializes in designing and manufacturing safety products such as rupture discs and pressure relief valves, serving various industries including pharmaceutical, chemical, and oil and gas [2][8]. Financial Aspects - CDC generated approximately $109 million in proforma revenue in 2024, with around 80% being recurring revenue, indicating a strong revenue model [3]. - The acquisition is expected to be immediately accretive to Baker Hughes' earnings and cash flow per share, as well as improve the segment margins of its Industrial & Energy Technology (IET) division [4][8]. Strategic Fit - The acquisition aligns with Baker Hughes' portfolio optimization strategy, focusing on core businesses with strong growth and synergy opportunities [4]. - The addition of CDC's products complements Baker Hughes' existing Control Valve and High-Pressure Relief Valve offerings, enhancing its market position [2][4]. Transaction Details - The acquisition will be funded with cash on hand and is anticipated to close in the fourth quarter of 2025, pending regulatory approvals [6].