American energy services firm Baker Hughes has signed an agreement to sell the assets of its surface pressure control flow (SPC Flow) business unit to private equity fund Pelican Energy.
The SPC flow division is a part of Baker Hughes’ Oilfield Equipment segment. It supplies tools and machinery needed by oil and gas drillers.
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According to Reuters, the sale comes as Baker Hughes and other oilfield services firms have been selling their assets in the wake of lower drilling activity.
Pelican managing partner Mike Scott stated: “This carveout transaction will enable the business to be a more focused, nimble and responsive company.
“We are glad to be supporting this management team that strongly believes that as a more entrepreneurial company, they will be better positioned to compete and win in these challenging markets.”
Baker Hughes will retain the ‘Surface Pressure Control Projects’ business in the Middle East, Africa, North Sea and Asia.
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By GlobalDataThe transaction value has not been disclosed by the companies.
SPC Flow business vice-president Rusty Justiss said: “This is an exciting opportunity and we are confident in our future as an independent company under Pelican’s ownership. This team is one of the most experienced wellhead teams in the industry.
“This transaction allows us to go back to our roots, centered around the legacy of Wood Group Pressure Control. As a focused company with an empowered and experienced workforce, we will serve our customers even better.”
The deal is expected to be closed in the fourth quarter of this year.
Baker Botts served as legal counsel to Pelican Energy, while McDermott Will & Emery has been appointed as the legal counsel to Baker Hughes for the transaction.
In July, Baker Hughes announced that it suffered a $201m loss in Q2 2020 amid the Covid-19 pandemic and its impact on oil and other commodity prices. Revenue from the company’s oilfield services business plunged 26% to $2.41bn, while total revenue fell 21% to $4.74bn in the quarter that ended in June.
