Baker Hughes agreed to sell its NGS product line to private-equity firm First Reserve and the product line’s Talamona branch in Italy to Pietro Fiorentini SpA for a combined value of $375 million. Financial terms of the individual agreements were not disclosed.
The divestitures come roughly a month after GE announced plans to divest its stake from Baker Hughes as the Boston-based conglomerate chooses to narrow its focus on its aviation, power and renewable energy businesses. The separation is expected to occur in an “orderly manner” over the next two to three years.
NGS is part of Baker Hughes’ turbomachinery and process solutions segment, providing commercial and industrial products such as gas meters, chemical injection pumps, pipeline repair products and electric actuators.
The First Reserve transaction includes the transfer of about 450 employees located in eight countries, including three manufacturing sites in North America and the U.K. In a separate transaction, Pietro Fiorentini will gain roughly 40 employees and a manufacturing site in Talamona, Italy.
“We have found the right buyers for the NGS business, at an attractive valuation. We know our customers and employees are in good hands with both First Reserve and Pietro Fiorentini,” Baker Hughes Chairman and CEO Lorenzo Simonelli said in a statement. “Going forward, we will continue to evaluate our portfolio to best deliver for our customers and achieve our financial priorities of expanding margins, increasing market share and outperforming on cash generation.”
Baker Hughes said it will work closely with the buyers to ensure a seamless transition for impacted employees, customers and suppliers. Both transactions are expected to close in the second half of 2018, subject to customary closing conditions and appropriate regulatory approvals.
J.P. Morgan was the lead financial adviser and Jones Day was legal counsel to Baker Hughes for its divestitures.
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