Vallari Srivastava and Aishwarya Jain
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By Vallari Srivastava and Aishwarya Jain
(Reuters) -Baker Hughes said on Monday it will sell its precision sensors and instrumentation (PSI) product line to aerospace and defense parts manufacturer Crane for $1.15 billion, as the oilfield services provider looks to optimize its portfolio.
CEO Lorenzo Simonelli has been reshaping Baker Hughes to adapt to the global energy transition, shedding non-core assets while investing in cleaner energy solutions.
The company has leaned on its portfolio refinement efforts to boost earnings and cash flow durability as the oil industry grapples with weak spending on oilfield activity.
Baker Hughes last week sold 65% of its surface pressure control business to a unit of equipment maker Cactus for $334.5 million.
"This non-core product line (PSI) is an area where BKR clearly wasn't going to invest heavily in R&D or work to restructure the businesses," Stifel analyst Stephen Gengar said, adding the sale likely bolsters Baker's ability to invest in other high growth areas in its industrial and energy segment.
Meanwhile, Crane has been focusing on engineered products with a higher gross margin profile since it spun off its payment and merchandising technology business into a separate company, Crane NXT, in April 2023, CEO Alex Acala said.
Baker Hughes' PSI unit includes three brands — Druck, Reuter-Stokes and Panametrics — which supply pressure sensing, radiation detection and flow measurement technologies used across aerospace, nuclear as well as industrial markets.
Crane said Druck will help strengthen its business of pressure sensing equipment, which is used in both single-aisle and widebody aircraft.
The unit will also boost the company's presence in the ground-based test and calibration equipment space, Crane added.
The PSI unit is projected to generate about $390 million in revenue and $60 million in adjusted EBITDA in 2025.
The transaction is expected to close at the end of 2025 or early 2026, Baker Hughes said.
(Reporting by Vallari Srivastava and Aishwarya Jain in Bengaluru; Editing by Anil D'Silva and Shreya Biswas)
