To acquire stimulation and sand control business, with associated vessels and BJ Services product line.
Global oilfield service-and-supply heavyweight Baker Hughes Inc., Houston, (NYSE: BHI) plans to sell certain assets in the Gulf of Mexico to a subsidiary of Superior Energy Services Inc., New Orleans, (NYSE: SPN) for approximately $55 million.
The package incorporates the company's stimulation and sand control business, which includes the HR Hughes and Blue Ray stimulation vessels and the sand control completion tools product line of Houston-based BJ Services Co. (NYSE: BJS). Superior will also acquire a tool and screen manufacturing facility and technology center in Houston.
In April, Baker Hughes completed its merger with BJ Services in a deal valued at approximately $6.8 billion in stock and cash. In conjunction with the U.S. Department of Justice, Baker Hughes agreed to divest its stimulation and sand control assets.
Superior chief executive David Dunlap believes the acquisition represents an unprecedented opportunity to enter a high-technology market. "The acquisition of the sand control assets with their world-class manufacturing facility and product line will provide us greater exposure to well completions and to intervention projects earlier in the life cycle of the well," Dunlap says.
He adds that despite uncertain market conditions in the deepwater Gulf of Mexico, Superior will have an established platform from which it can further its expansive global products and services.
Superior intends to add experienced management and sales teams to the acquired business. The company will use its existing revolving credit facility to fund the transaction.
The deal is expected by July 31, and Baker Hughes will subsequently complete its merger with BJ Services.