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

Rhea-AI Summary

Baker Hughes announced the acquisition of Continental Disc Corporation (CDC) for $540 million in an all-cash transaction. CDC, based in Liberty, Missouri, is a leading provider of safety-critical pressure management solutions, including rupture discs and pressure/vacuum relief valves. CDC generated $109 million in proforma revenue in 2024, with 80% being recurring revenue. The acquisition complements Baker Hughes' Industrial & Energy Technology portfolio and serves various industries including pharmaceutical, chemical, food and beverage, oil and gas, and aerospace markets. The deal is expected to close in Q4 2025 and will be immediately accretive to earnings, cash flow per share, and IET's segment margins. This acquisition, along with recent Surface Pressure Control transaction and sale of Precision Sensors & Instrumentation line, advances Baker Hughes' portfolio optimization strategy.

Positive

• Strong recurring revenue profile with 80% of CDC's $109M revenue being recurring
• Immediate accretion to earnings, cash flow per share, and segment margins
• Complementary product portfolio expanding Baker Hughes' addressable market
• Strategic expansion into multiple attractive end markets including pharmaceutical and aerospace
• All-cash transaction preserves financial flexibility with no dilution to shareholders

Negative

• Significant cash outlay of $540 million may impact available capital for other investments
• Integration risks with combining different product lines and operations
• Regulatory approval requirements could delay closing until Q4 2025

Insights

M&A and Industrial Technology Strategist

Baker Hughes' $540M acquisition of CDC strengthens its industrial portfolio with high-margin, recurring revenue streams in critical pressure management.

Baker Hughes' $540 million acquisition of Continental Disc Corporation (CDC) represents a strategic enhancement to its Industrial & Energy Technology (IET) segment. CDC's portfolio of rupture discs and pressure/vacuum relief valves generates substantial recurring revenue, with 80% of its $109 million proforma revenue in 2024 coming from replacement parts for its large installed base. This recurring revenue model is particularly valuable as it provides more predictable financial performance.

The transaction metrics reveal an acquisition multiple of approximately 5x revenue, which appears reasonable for an industrial technology business with high-margin recurring revenue. CDC's products address critical safety applications across pharmaceutical, chemical, food and beverage, oil and gas, and aerospace markets—diversifying Baker Hughes' end-market exposure beyond its traditional energy focus.

This acquisition aligns with Baker Hughes' stated portfolio optimization strategy alongside the recently announced Surface Pressure Control transaction and divestiture of the Precision Sensors & Instrumentation product line. Together, these moves indicate a deliberate reshaping of the portfolio toward businesses with higher margins, more predictable revenue streams, and improved return profiles.

The immediate accretion to earnings, cash flow per share, and segment margins suggests CDC's profitability exceeds Baker Hughes' current average margins. With complementary product lines and potential cross-selling opportunities through Baker Hughes' global distribution network, the acquisition creates pathways for revenue synergies beyond the standalone business case.

• 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 markets
• Transaction adds complementary portfolio of products to Baker Hughes existing valves product line
• Acquisition 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 Hughes
Baker 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 Tinicum
Tinicum, 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
+1 713-906-8407
adrienne.lynch@bakerhughes.com

Investor Relations

Chase Mulvehill
+1 346-297-2561
investor.relations@bakerhughes.com

FAQ

How much is Baker Hughes paying to acquire Continental Disc Corporation?

Baker Hughes is acquiring CDC for approximately $540 million in an all-cash transaction.

What is Continental Disc Corporation's annual revenue?

CDC generated $109 million in proforma revenue in 2024, with approximately 80% being recurring revenue.

When is the BKR-CDC acquisition expected to close?

The acquisition is expected to close in the fourth quarter of 2025, subject to regulatory approvals and customary conditions.

What products does Continental Disc Corporation manufacture?

CDC manufactures rupture discs, rupture disc holders, burst disc indicators, pressure and vacuum relief valves, flame and detonation arrestors, and related safety products.

How will the CDC acquisition impact Baker Hughes' earnings?

The acquisition is expected to be immediately accretive to Baker Hughes' earnings and cash flow per share, as well as IET's segment margins.

What industries does Continental Disc Corporation serve?

CDC serves multiple industries including pharmaceutical, chemical, food and beverage, oil and gas, and aerospace markets.