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Baker Hughes to Acquire Continental Disc Corporation, a Differentiated Leader in Pressure Management Solutions

1. BKR to acquire CDC for $540 million, enhancing safety product offerings. 2. Acquisition expected to increase earnings and cash flow immediately. 3. CDC's products are crucial across various industries like oil and gas. 4. 80% of CDC's 2024 revenue was recurring, strengthening BKR's revenue base. 5. The deal reflects BKR's strategy for durable earnings and portfolio optimization.

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$39.0406/16 08:36 AM EDTEvent Start
$39.66506/17 12:59 PM EDTLatest Updated
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FAQ

Why Bullish?

The acquisition is anticipated to enhance BKR's earnings immediately, similar to prior successful buyouts that led to market confidence. Historical transactions that introduced high-margin services have positively influenced share prices.

How important is it?

The acquisition is a significant shift for BKR, expected to drive profitability growth and market position; thus, it heavily influences investor sentiment and stock performance.

Why Short Term?

Immediate earnings accretion suggests a favorable short-term impact on stock performance, akin to past strategic acquisitions that bolstered quarterly results.

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CDC’s rupture disc and pressure/vacuum relief valve portfolio is a leader in addressing pressure/vacuum safety and pressure management for critical applications across a broad range of attractive end marketsTransaction adds complementary portfolio of products to Baker Hughes existing valves product lineAcquisition expected to be immediately accretive to earnings and cash flow per share and IET’s segment margins HOUSTON and LONDON, June 16, 2025 (GLOBE NEWSWIRE) -- Baker Hughes (NASDAQ: BKR), an energy technology company, announced Monday it has agreed to acquire Continental Disc Corporation (CDC), a leading provider of safety-critical pressure management solutions, from investment partnerships managed by Tinicum Incorporated in an all-cash transaction for approximately $540 million. Headquartered in Liberty, Missouri, CDC designs and manufactures rupture discs, rupture disc holders, burst disc indicators, pressure- and vacuum-relief valves, flame and detonation arrestors, and related safety products. These products, which are highly complementary to Baker Hughes Industrial & Energy Technology’s (IET) existing Control Valve and High-Pressure Relief Valve offerings, are deployed across a broad range of industries, including applications across pharmaceutical, chemical, food and beverage, oil and gas, and aerospace markets. With a large global installed base and essential products that require regular replacement to maintain safety and operational reliability, CDC generates significant recurring revenue. In 2024, approximately 80% of CDC’s $109 million in proforma revenue was recurring – a key driver of its strong returns and highly accretive margin profile. The CDC acquisition, along with the recently announced Surface Pressure Control (SPC) transaction and sale of the Precision Sensors & Instrumentation (PSI) product line, advances Baker Hughes’ portfolio optimization strategy designed to drive more durable earnings and cash flow. These actions reflect the company’s disciplined approach to capital allocation, with a focus on core businesses that offer compelling return potential. The addition of CDC aligns with Baker Hughes’ acquisition criteria: a strong strategic fit with growth and synergy opportunities, accretive margins and returns, and a lifecycle business model that supports long-term aftermarket demand and strengthens earnings quality. The acquisition is expected to be immediately accretive to earnings and cash flow per share, as well as IET’s segment margins. “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,” Baker Hughes Chairman and CEO Lorenzo Simonelli said. “Together with the recently announced SPC and PSI transactions, this acquisition sets the blueprint for our portfolio optimization strategy – focused on driving higher returns and creating long-term value for our shareholders.” “While we will miss working with the extraordinarily dedicated CDC team, we are thrilled to see the business and CDC’s employees join Baker Hughes, a leader in the global process control and energy technology industries. 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,” added Michael Donner, Partner of Tinicum. The acquisition will be funded with cash on hand and is expected to close in the fourth quarter of 2025, subject to completion of all customary conditions and required regulatory approvals. Jefferies is serving as financial adviser and King and Spalding is serving as legal adviser for Baker Hughes on this transaction. William Blair & Company and Baird are serving as financial advisers and Morrison Foerster is serving as legal adviser to the board of Continental Disc Corporation. About Baker HughesBaker Hughes (NASDAQ: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com. About TinicumTinicum, founded in 1974 as a family investment office, is a private partnership that manages a diversified group of manufacturing, distribution, and industrial technology companies. It seeks to be a trusted partner of business owners and executives who share its belief that long-term prosperity can be created by teams of capable, honest people working together and investing diligently to fulfill the potential of a great business. For more information, visit www.tinicum.com. For more information, please contact: Media Relations Adrienne M. Lynch+1 713-906-8407adrienne.lynch@bakerhughes.com Investor Relations Chase Mulvehill+1 346-297-2561investor.relations@bakerhughes.com

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