Cactus Companies has agreed to acquire a 65% controlling stake in Baker Hughes' Surface Pressure Control (SPC) business.

The SPC unit specialises in the design, manufacture and service of wellheads and production tree equipment, primarily for international markets.

Approximately 85% of SPC's revenues are generated in the Middle East, with no significant sales in the US market.

The deal is expected to enhance Cactus' financial metrics, offering greater revenue, earnings and cash flow visibility thanks to SPC's substantial product and aftermarket service backlog, valued at more than $600m as of 31 December 2024.

The acquisition is also seen as highly accretive while maintaining a conservative balance sheet.

A joint venture (JV) will be formed to hold SPC, with Baker Hughes retaining a 35% ownership post-closing. The JV will operate independently from Cactus’ existing Pressure Control business.

Cactus chairman and CEO Scott Bender said: “This transaction provides us with improved access to important new non-tariff-impacted markets for both pressure control and spoolable technologies products to continue the growth trajectory we have demonstrated since our founding, and should diversify and stabilise our revenue streams through cycles.”

Cactus is set to purchase the majority interest for $344.5m, which reflects a total enterprise value of $530m on a cash-free, debt-free basis, subject to customary purchase price adjustments.

Additionally, Cactus plans to capitalise the JV's balance sheet with $70m of operating cash at close, of which Baker Hughes will contribute 35% – a sum that will be reimbursed over time.

After the second anniversary of the closing, Cactus will have the option to buy, and Baker Hughes will have the right to demand that Cactus purchases the remaining 35% interest.

Baker Hughes chairman and CEO Lorenzo Simonelli said: “This transaction marks an important step in our ongoing portfolio optimisation strategy, enabling us to sharpen our focus on core growth areas while continuing to drive higher returns, reinforcing our commitment to long-term value for our shareholders.”

The transaction is expected to close in the second half of 2025, subject to customary conditions including regulatory approvals.

"Cactus to buy 65% stake in Baker Hughes SPC business" was originally created and published by Offshore Technology, a GlobalData owned brand.

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