Cactus (NYSE: WHD) details major SPC joint venture and pro forma impact
Filing Impact
Filing Sentiment
Form Type
8-K/A
Rhea-AI Filing Summary
Cactus, Inc. filed an amended current report to add detailed financial information for its acquisition of 65% of Baker Hughes Pressure Control LLC, the Surface Pressure Control business. The amendment supplies audited 2024 special purpose statements and unaudited nine‑month 2025 data, showing SPC revenue of $503 million in 2024 and $469 million for the nine months ended September 30, 2025.
The filing also presents unaudited pro forma condensed combined financials prepared under ASC 805. Cactus records preliminary purchase consideration of $382.0 million, including $371.0 million cash and deferred payment, recognizes $190.2 million of identifiable intangibles, $95.3 million of goodwill, a $28.2 million inventory step‑up and a $150.0 million mezzanine non‑controlling interest for Baker Hughes’ 35% stake.
Positive
- Large strategic acquisition with sizable revenue base: SPC generated $503 million of revenue in 2024 versus Cactus’ $1.13 billion, and $469 million for the nine months ended September 30, 2025, indicating a material expansion of Cactus’ scale and international surface pressure control presence.
Negative
- None.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 8-K/A
(Amendment No.1)
______________________________________________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 1, 2026
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
______________________________________________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices)
(Zip Code)
(713 ) 626-8800
(Registrant’s telephone number, including area code)
______________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Introductory Note
On January 2, 2026, Cactus, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) to report that, among other things, Cactus UK Holding Limited, a subsidiary of the Company, had completed its acquisition of 65% of the limited liability company membership interests in Baker Hughes Pressure Control LLC (the “Transaction”). In the Original Form 8-K, the Company disclosed that it would file the historical financial statements and pro forma financial information required by Items 9.01(a) and (b) of Form 8-K, respectively, by amendment as permitted by such Items. The Company is filing this Amendment No. 1 to provide such historical financial statements and pro forma financial information. The pro forma financial information included as Exhibit 99.2 to this Amendment No. 1 has been presented for illustrative purposes only as required by Form 8-K, and is not intended to, and does not purport to, represent what the Company’s actual results or financial condition would have been if the Transaction had occurred on the relevant date, and is not intended to project the future results or the financial condition that the Company may achieve following the Transaction.
Except as described in this Amendment No. 1, all other information in the Original Form 8-K remains unchanged.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business or funds acquired.
The audited special purpose financial statements of the Surface Pressure Control Business of Baker Hughes Company as of December 31, 2024 and for the year then ended, and the related notes and the related independent auditors’ report thereon, are filed herewith as Exhibit 99.1 and incorporated herein by reference.
The unaudited special purpose financial information of the Surface Pressure Control Business of Baker Hughes Company as of September 30, 2025 and for the nine-month period then ended, and the related notes, are filed herewith as Exhibit 99.1 and incorporated herein by reference.
(b) Pro forma financial information.
The unaudited pro forma condensed combined financial information (i) as of September 30, 2025 and for the nine-month period then ended and (ii) for the year ended December 31, 2024, and the related notes, are filed herewith as Exhibit 99.2 and incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 23.1 | Consent of KPMG LLP # | |||||||
| 99.1 | Audited special purpose financial statements of the Surface Pressure Control Business of Baker Hughes Company as of December 31, 2024 and for the year then ended, and the related notes and the related independent auditors’ report thereon, and the unaudited special purpose financial information of the Surface Pressure Control Business of Baker Hughes Company as of September 30, 2025 and for the nine-month period then ended, and the related notes # | |||||||
| 99.2 | Unaudited pro forma condensed combined financial information (i) as of September 30, 2025 and for the nine-month period then ended and (ii) for the year ended December 31, 2024, and the related notes # | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
| # Filed herewith. | ||||||||
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Cactus, Inc. | ||||||||
March 19, 2026 | By: | /s/ Jay A. Nutt | ||||||
| Date | Name: | Jay A. Nutt | ||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
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Surface Pressure Control Special Purpose Financial Statements for the Year Ended December 31, 2024 (Audited) and for the Nine Months Ended September 30, 2025 (Unaudited) (With Independent Auditors' Report Thereon)
Surface Pressure Control Table of Contents Page No. Independent Auditors' Report 1 Special Purpose Financial Statements: Special Purpose Statements of Revenue and Direct Expenses 3 Special Purpose Statements of Assets Acquired and Liabilities Assumed 4 Notes to Special Purpose Financial Statements 5 i
Independent Auditors’ Report The Board of Directors Baker Hughes Company: Opinion We have audited the special purpose financial statements of the Surface Pressure Control Business of Baker Hughes Company (the Business), which comprise the Special Purpose Statements of Assets Acquired and Liabilities Assumed as of December 31, 2024 and the related Special Purpose Statements of Revenue and Direct Expenses for the year then ended, and the related notes (collectively referred to as the “special purpose financial statements”). In our opinion, the accompanying special purpose financial statements present fairly, in all material respects, the assets acquired and liabilities assumed of the Business as of December 31, 2024, and its revenue and direct expenses for the year then ended, in accordance with U.S. generally accepted accounting principles. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Special Purpose Financial Statements section of our report. We are required to be independent of Baker Hughes Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis of Matter We draw attention to Note 1 to the special purpose financial statements, which describes that the accompanying special purpose financial statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of the financial position or results of operations of the Business. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Special Purpose Financial Statements Management is responsible for the preparation and fair presentation of the special purpose financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the special purpose financial statements that are free from material misstatement, whether due to fraud or error. In preparing the special purpose financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Business’s ability to continue as a going concern for one year after the date that the special purpose financial statements are issued. KPMG LLP 811 Main Street Houston, TX 77002 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. 1
Auditors’ Responsibilities for the Audit of the Special Purpose Financial Statements Our objectives are to obtain reasonable assurance about whether the special purpose financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the special purpose financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the special purpose financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the special purpose financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Business’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the special purpose financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Business’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. Houston, Texas November 26, 2025 2
SURFACE PRESSURE CONTROL SPECIAL PURPOSE STATEMENTS OF REVENUES AND DIRECT EXPENSES (In millions) Nine Months Ended September 30, 2025 (Unaudited) Year Ended December 31, 2024 Revenue: Sales of goods $ 354 $ 364 Sales of goods - related party 2 5 Sales of services 113 134 Total revenue 469 503 Direct expenses: Cost of goods sold 258 280 Cost of services sold 66 71 Selling, general and administrative 40 54 Other (income) loss, net 5 5 Total direct expenses 369 410 Less: Net income attributable to noncontrolling interests 4 4 Revenue less direct expenses $ 96 $ 89 See accompanying Notes to Special Purpose Financial Statements 3
SURFACE PRESSURE CONTROL SPECIAL PURPOSE STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (In millions) September 30, 2025 (Unaudited) December 31, 2024 ASSETS ACQUIRED Current Assets: Current receivables, net $ 221 $ 208 Inventories, net 118 109 All other current assets 2 2 Total current assets acquired 341 319 Property, plant and equipment, less accumulated depreciation 31 32 Contract and other deferred assets 13 12 All other assets 25 25 Total assets acquired $ 410 $ 388 LIABILITIES ASSUMED Current Liabilities: Accounts payable $ 112 $ 93 Progress collections and deferred income 25 30 All other current liabilities 34 31 Total current liabilities assumed 171 154 Employee related liabilities 11 10 All other liabilities 19 19 Total liabilities assumed $ 201 $ 183 See accompanying Notes to Special Purpose Financial Statements 4
NOTE 1. DESCRIPTION OF TRANSACTION AND BASIS OF PRESENTATION DESCRIPTION OF THE TRANSACTION Baker Hughes Company ("Baker Hughes," “Company,” or "Seller") is an energy technology company with a diversified portfolio of technologies and services that span the energy and industrial value chain. The Surface Pressure Control (“SPC” or the “Business”) product line is a manufacturer and service provider of pressure control equipment for oil and gas drilling and completion and production. On June 2, 2025, Baker Hughes Company entered into an agreement (the “Purchase Agreement”) to form a joint venture with a subsidiary of Cactus, Inc. (“Cactus” or “Buyer”), in which Baker Hughes contributed its SPC product line to the newly formed joint venture in exchange for a 35% non-controlling interest and cash consideration of approximately $345 million. Cactus, a global manufacturer and service provider of pressure control equipment for oil and gas drilling, completion and production, assumed operational control, owning 65% of the joint venture, while Baker Hughes retained a 35% stake. The joint venture operates independently from Cactus’ existing Pressure Control business and will focus on maintaining its leadership position in the international market for surface wellhead and production tree systems. BASIS OF PRESENTATION The accompanying Special Purpose Financial Statements (referred to as the "Financial Statements") have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and have been prepared for inclusion in the 8-K filing of the Buyer as required by Rule 3-05(e), “Financial statements of businesses acquired or to be acquired”, of the United States Securities and Exchange Commission’s (“SEC”) Regulation S-X. It is impracticable to prepare complete financial statements related to the Business as it was not a separate legal entity of the Seller and was never operated as a stand-alone business, division or subsidiary. The Seller has never prepared full stand-alone or full carve-out financial statements for the Business and has never maintained distinct and separate accounts necessary to prepare such financial statements. The Financial Statements are based upon the Purchase Agreement and relief under SEC Rule 3-05(e) as the acquisition by the Buyer meets the qualifying conditions established by the SEC to provide special purpose financial statements in lieu of full financial statements of the acquired business. The Financial Statements have been derived from the accounting records of the Business using historical results of operations and financial position information. The Financial Statements have been prepared to reflect the assets acquired and liabilities assumed by the Buyer in accordance with the Purchase Agreement and include costs directly associated with producing revenue, including a reasonable allocation of certain direct expenses, and exclude expenses not directly involved in revenue producing activities, such as corporate overhead unrelated to the operational activities, interest, and income tax expense. Therefore, the Financial Statements are not intended to be a complete presentation of the financial position or results of operations of the Business in conformity with U.S. GAAP. The Financial Statements are not indicative of the financial condition or results of operations of the Business on a go-forward and stand-alone basis. As the Business has historically been managed as part of the operations of the Seller and has not been operated as a stand-alone entity, information about the Business’ operating, investing, and financing cash flows is not available. As such, statements of cash flows are not presented in the Financial Statements. The Financial Statements include revenue generated by the Business less expenses directly attributable to the Business and certain allocations of direct expenses incurred by the Seller. Direct expenses allocated to the Business include employee costs, warehousing, freight, shipping and handling, research and development, facility related, and other manufacturing costs. The allocated expenses that directly supported the revenue generation of the Business were allocated based on a percentage of revenue, headcount, or other methodologies deemed to be reasonable by management. Management believes such allocations reflect the costs to support the revenue generation of the Business. Allocations of the Seller’s corporate overhead expenses, such as facilities, legal, finance, human resources, and business development, not directly related to the operations of the Business have been excluded from the Financial Statements. Surface Pressure Control Notes to the Special Purpose Financial Statements 5
The Statements of Assets Acquired and Liabilities Assumed include only the assets acquired by the Buyer pursuant to the Purchase Agreement or otherwise agreed upon between the Seller and the Buyer. Certain assets and liabilities related to the Business will not be sold per the terms of the Purchase Agreement and are therefore not included in the Statements of Assets Acquired and Liabilities Assumed. The Financial Statements also exclude goodwill, as there was no goodwill specifically identifiable to the Business. All significant intercompany balances and transactions have been eliminated. The operations of the Business are included in the consolidated federal income tax return of the Seller, to the extent appropriate, and are included in the foreign, state and local returns of certain other subsidiaries of the Seller. A provision for income taxes has not been presented in the Financial Statements as permissible under Rule 3-05(e). NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the Financial Statements requires management to make estimates and judgments that affect the reported amounts and disclosures. The Business bases its estimates and judgments on historical experience and on various other assumptions and information that it believes to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty, and accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Business' operating environment changes. While the Business believes that the estimates and assumptions used in the preparation of the Financial Statements are appropriate, actual results could differ from those estimates. Estimates are used for, but are not limited to, determining the following: allowance for credit losses and inventory valuation reserves; recoverability of long-lived assets; revenue recognition on long-term contracts; and useful lives used in depreciation and amortization. Foreign Currency Assets and liabilities of non-U.S. operations with a functional currency other than the U.S. dollar have been translated into U.S. dollars using the Business' period-end exchange rates, and revenue and expenses have been translated at average rates for the respective periods. Revenue Recognition The Business recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Business expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. The Business recognizes revenue for equipment at the point in time that the customer obtains control of the good. The Business uses proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is generally determined based on historical data of transit times between regions. The Business' billing terms for these point in time equipment contracts vary, but are generally based on shipment of the equipment to the customer. Revenue for certain oilfield services is recognized on an over time basis as performed. If the terms of a service contract give the Business the right to invoice the customer for an amount that corresponds directly to the value of the performance completed to date, revenue is recognized at the amount for which the Business has the right to invoice. The Business' products and services are generally sold based upon purchase orders, contracts, or other legally enforceable arrangements with customers that include fixed or determinable prices but do not generally include right of return provisions or other significant post-delivery obligations. Surface Pressure Control Notes to the Special Purpose Financial Statements 6
Allowance for Credit Losses The Business monitors its customers' payment history and current creditworthiness to determine that collectability of the related financial assets is reasonably assured. The Business also considers the overall business climate in which its customers operate. The Business does not generally require collateral in support of its current receivables, but it may require payment in advance or security in the form of a letter of credit or a bank guarantee. For accounts receivable, a loss allowance matrix is utilized to measure lifetime expected credit losses. The matrix contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations. Inventories All inventories are stated at the lower of cost or net realizable values and they are measured on a first-in, first- out ("FIFO") basis or average cost basis. As necessary, the Business records provisions and maintains reserves for excess, slow moving and obsolete inventory. To determine these reserve amounts, the Business regularly reviews inventory quantities on hand and compares them to estimates of future product demand, market conditions, production requirements and technological developments. Property, Plant and Equipment Property, plant and equipment ("PP&E") is initially stated at cost and is depreciated over its estimated economic life. Subsequently, PP&E is measured at cost less accumulated depreciation, which is generally provided by using the straight-line method over the estimated economic lives of the individual assets, and impairment losses. The Business reviews PP&E and certain other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When testing for impairment, the Business groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of recoverability is made based upon the estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related assets. Leases The Business enters into various contractual arrangements for the right to use facilities and equipment. At contract inception, management evaluates whether each of these arrangements contains a lease and classifies all identified leases as either operating or finance. If the arrangement is subsequently modified, the classification is re- evaluated. Upon commencement of the lease, management recognizes a lease liability and corresponding right-of- use ("ROU") asset. Lease assets are tested for impairment in the same manner as other long-lived assets. NOTE 3. CURRENT RECEIVABLES Current receivables consist of the following: September 30, 2025 (Unaudited) December 31, 2024 Customer receivables $ 205 $ 196 Other 19 15 Total current receivables 224 211 Less: Allowance for credit losses (3) (3) Total current receivables, net $ 221 $ 208 Customer receivables are recorded at the invoiced amount. The "Other" category consists primarily of indirect taxes. Surface Pressure Control Notes to the Special Purpose Financial Statements 7
NOTE 4. INVENTORIES Inventories, net of reserves of $8 million and $12 million in September 30, 2025 and December 31, 2024, respectively, consist of the following: September 30, 2025 (Unaudited) December 31, 2024 Finished goods $ 79 $ 94 Work in process and raw materials 39 15 Total inventories, net $ 118 $ 109 NOTE 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following: Useful Life September 30, 2025 (Unaudited) December 31, 2024 Buildings, structures and related equipment 5 - 40 years 21 24 Machinery, equipment and other 1 - 20 years 70 64 Total cost 91 88 Less: Accumulated depreciation (60) (56) Property, plant and equipment, less accumulated depreciation $ 31 $ 32 Depreciation expense relating to property, plant and equipment was $4 million and $4 million for the periods ended September 30, 2025 and December 31, 2024, respectively. Surface Pressure Control Notes to the Special Purpose Financial Statements 8
NOTE 6. LEASES The Business' leasing activities primarily consist of operating leases for service centers, manufacturing facilities, sales and administrative offices, and certain equipment. As of December 31, 2024, maturities of operating lease liabilities are as follows: Year Operating Leases 2025 $ 3 2026 3 2027 2 2028 2 2029 2 Thereafter 9 Total lease payments 21 Less: imputed interest (3) Total $ 18 Amounts recognized in the Financial Statements for operating leases consist of the following: September 30, 2025 (Unaudited) December 31, 2024 All other current liabilities $ 4 $ 3 All other liabilities 15 15 Total $ 19 $ 18 Right-of-use assets of $19 million and $18 million as of September 30, 2025 and December 31, 2024, respectively, are included in "All other assets" in the Financial Statements. The weighted-average remaining lease term as of September 30, 2025 and December 31, 2024 was approximately 8 years and 9 years, respectively, for operating leases. The weighted-average discount rate used to determine the operating lease liability as of September 30, 2025 and December 31, 2024 was 4.2% and 4.1%, respectively. NOTE 7. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS Revenue consisted of the following: Nine Months Ended September 30, 2025 (Unaudited) Year Ended December 31, 2024 Sales of goods $ 354 $ 364 Sales of goods - related party 2 5 Sales of services 113 134 Total $ 469 $ 503 Sales to related parties consist primarily of surface pressure control equipment sold to Baker Hughes International Limited, a wholly owned subsidiary of Baker Hughes. Surface Pressure Control Notes to the Special Purpose Financial Statements 9
NOTE 8. SUBSEQUENT EVENTS Subsequent events have been evaluated through November 26, 2025, the date the Financial Statements were available for issuance. There are no subsequent events which have not been disclosed in the Financial Statements. Surface Pressure Control Notes to the Special Purpose Financial Statements 10
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information presents information about Cactus, Inc.’s (the “Company” or “Cactus”) consolidated balance sheet and statements of income, after giving effect to the acquisition of Baker Hughes Pressure Control LLC (“SPC”) pursuant to the Framework Agreement (“Agreement”), dated June 2, 2025, between Cactus Companies, LLC, Baker Hughes Holdings LLC (the “Seller”), and SPC (the “Transaction”), that closed on January 1, 2026 (the “Transaction Date”) as further described in “Note 1. Description of the Transaction”. The unaudited pro forma condensed combined financial information is derived from and should be read in conjunction with:
• the Company’s unaudited financial statements included in its quarterly report on Form 10-Q as of and for the nine months ended September 30, 2025, filed with the SEC on October 30, 2025;
• the Company’s audited financial statements included in its annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025;
• SPC’s unaudited special purpose financial statements as of and for the nine months ended September 30, 2025, filed as an exhibit to the Company’s current report on Form 8-K/A, to which this unaudited pro forma condensed combined financial information is an exhibit (the “8-K/A”); and
• SPC’s audited special purpose financial statements for the year ended December 31, 2024, filed as an exhibit to the 8-K/A.
The accompanying unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and reflects the impact of the Transaction on the historical financial information of Cactus.
The unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statements of income, referred to collectively as the unaudited pro forma condensed combined financial information, were prepared using the acquisition method of accounting for the Transaction. Under this method of accounting, which is in accordance with Accounting Standards Codification 805 – Business Combinations (“ASC 805”) under generally accepted accounting principles in the United States (“U.S. GAAP”), Cactus is the accounting acquirer of SPC and the purchase price for SPC is allocated to the underlying assets acquired and liabilities assumed based on their respective fair values, with any excess purchase price allocated to goodwill.
The unaudited pro forma condensed combined balance sheet reflects the estimated effects of the Transaction as if it had been completed on September 30, 2025, and the unaudited pro forma condensed combined statements of income reflect the estimated effects of the Transaction as if it had been completed on January 1, 2024.
The unaudited pro forma condensed combined statements of income were derived from Cactus’ historical financial statements and SPC’s historical special purpose financial statements, and give effect to the following:
• the Transaction and the impact of preliminary purchase accounting for the acquired assets and assumed liabilities;
• transaction costs incurred in connection with the Transaction; and
• the related income tax effects of the pro forma adjustments.
The unaudited pro forma condensed combined financial information has been presented for informational purposes only and is not necessarily indicative of what the Company’s combined financial position or results of operations would have been had the Transaction been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company.
The unaudited pro forma condensed combined financial information contains adjustments that are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes to the information
1
presented in the unaudited condensed combined pro forma financial information. The assumptions underlying the pro forma adjustments are described in greater detail in the accompanying notes to the unaudited pro forma condensed combined financial information.
Additional information about the basis of presentation of this information is provided in “Note 2. Basis of Presentation” hereto.
2
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2025
| (USD in Thousands) | ||||||||||||||||||||||||||||||||
Cactus, Inc. (Historical) | Baker Hughes Pressure Control LLC ("SPC") Special Purpose Statement of Assets Acquired and Liabilities Assumed (Historical) | Transaction Accounting Adjustments (Note 4) | Notes | Pro Forma Combined for Transaction Accounting Adjustments | ||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 445,614 | - | (371,011) | A | 144,603 | |||||||||||||||||||||||||||
| 70,000 | B | |||||||||||||||||||||||||||||||
| Accounts receivable, net of allowance | 201,382 | 221,000 | - | 422,382 | ||||||||||||||||||||||||||||
| Inventories | 271,278 | 118,000 | 28,156 | C | 417,434 | |||||||||||||||||||||||||||
| Prepaid expenses and other current assets | 10,438 | 2,000 | - | 12,438 | ||||||||||||||||||||||||||||
| Total Current assets | 928,712 | 341,000 | (272,855) | 996,857 | ||||||||||||||||||||||||||||
| Noncurrent assets | ||||||||||||||||||||||||||||||||
| Property and equipment, net | 346,616 | 31,000 | 15,324 | D | 392,940 | |||||||||||||||||||||||||||
| Operating lease right-of-use assets, net | 20,870 | - | - | 20,870 | ||||||||||||||||||||||||||||
| Intangible assets, net | 152,001 | - | 190,200 | E | 342,201 | |||||||||||||||||||||||||||
| Goodwill | 203,028 | - | 95,251 | L | 298,279 | |||||||||||||||||||||||||||
| Deferred tax asset, net | 199,223 | - | - | 199,223 | ||||||||||||||||||||||||||||
| Investment in unconsolidated affiliates | 5,692 | - | - | 5,692 | ||||||||||||||||||||||||||||
| Contract and other deferred assets | - | 13,000 | - | 13,000 | ||||||||||||||||||||||||||||
| Other noncurrent assets | 8,634 | 25,000 | - | 33,634 | ||||||||||||||||||||||||||||
| Total Noncurrent assets | 936,064 | 69,000 | 300,775 | 1,305,839 | ||||||||||||||||||||||||||||
| Total Assets | 1,864,776 | 410,000 | 27,920 | 2,302,696 | ||||||||||||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||||
| Accounts payable | 67,248 | 112,000 | - | 179,248 | ||||||||||||||||||||||||||||
| Progress collections and deferred income | 13,065 | 25,000 | - | 38,065 | ||||||||||||||||||||||||||||
| Accrued expenses and other current liabilities | 62,813 | 34,000 | 11,034 | N.3 | 122,674 | |||||||||||||||||||||||||||
| 3,827 | G | |||||||||||||||||||||||||||||||
| 11,000 | J | |||||||||||||||||||||||||||||||
| Current portion of liability related to tax receivable agreement | 20,297 | - | - | 20,297 | ||||||||||||||||||||||||||||
3
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2025
| (USD in Thousands) | ||||||||||||||||||||||||||||||||
Cactus, Inc. (Historical) | Baker Hughes Pressure Control LLC ("SPC") Special Purpose Statement of Assets Acquired and Liabilities Assumed (Historical) | Transaction Accounting Adjustments (Note 4) | Notes | Pro Forma Combined for Transaction Accounting Adjustments | ||||||||||||||||||||||||||||
| Finance lease obligations, current portion | 7,394 | - | - | 7,394 | ||||||||||||||||||||||||||||
| Operating lease liabilities, current portion | 5,052 | - | - | 5,052 | ||||||||||||||||||||||||||||
| Total Current liabilities | 175,869 | 171,000 | 25,861 | 372,730 | ||||||||||||||||||||||||||||
| Noncurrent liabilities | ||||||||||||||||||||||||||||||||
| Deferred tax liability, net | 2,449 | - | 47,386 | I | 49,835 | |||||||||||||||||||||||||||
| Liability related to tax receivable agreement, net of current portion | 261,367 | - | - | 261,367 | ||||||||||||||||||||||||||||
| Finance lease obligations, net of current portion | 10,329 | - | - | 10,329 | ||||||||||||||||||||||||||||
| Operating lease liabilities, net of current portion | 16,875 | - | - | 16,875 | ||||||||||||||||||||||||||||
| Employee related liabilities | - | 11,000 | - | 11,000 | ||||||||||||||||||||||||||||
| Other noncurrent liabilities | 4,475 | 19,000 | - | 23,475 | ||||||||||||||||||||||||||||
| Total Noncurrent liabilities | 295,495 | 30,000 | 47,386 | 372,881 | ||||||||||||||||||||||||||||
| Total Liabilities | 471,364 | 201,000 | 73,247 | 745,611 | ||||||||||||||||||||||||||||
| MEZZANINE EQUITY | ||||||||||||||||||||||||||||||||
Redeemable non-controlling interest | - | - | 150,036 | K | 150,036 | |||||||||||||||||||||||||||
| Total Mezzanine equity | - | - | 150,036 | 150,036 | ||||||||||||||||||||||||||||
| EQUITY | ||||||||||||||||||||||||||||||||
| Stockholders' equity | ||||||||||||||||||||||||||||||||
| Preferred stock, $ 0.01 par value, 10,000 shares authorized, none issued and outstanding | - | - | - | - | ||||||||||||||||||||||||||||
| Class A common stock, $ 0.01 par value, 300,000 shares authorized, 68,840 shares issued and outstanding | 688 | - | - | 688 | ||||||||||||||||||||||||||||
| Class B common stock, $ 0.01 par value, 215,000 shares authorized, 11,007 shares issued and outstanding | - | - | - | - | ||||||||||||||||||||||||||||
| Additional paid-in capital | 540,945 | - | - | 540,945 | ||||||||||||||||||||||||||||
| Retained earnings | 650,356 | - | (3,827) | G | 646,529 | |||||||||||||||||||||||||||
| Assets in excess of liabilities | - | 209,000 | (209,000) | F | - | |||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (2,086) | - | - | (2,086) | ||||||||||||||||||||||||||||
| Total Stockholders' equity | 1,189,903 | 209,000 | (212,827) | 1,186,076 | ||||||||||||||||||||||||||||
| Non-controlling interest | 203,509 | - | 17,464 | H | 220,973 | |||||||||||||||||||||||||||
| Total Non-controlling interest | 203,509 | - | 17,464 | 220,973 | ||||||||||||||||||||||||||||
| Total Equity | 1,393,412 | 209,000 | (195,363) | 1,407,049 | ||||||||||||||||||||||||||||
| Total liabilities, mezzanine equity and stockholders' equity | 1,864,776 | 410,000 | 27,920 | 2,302,696 | ||||||||||||||||||||||||||||
| See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||||||||
4
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
For the period ended September 30, 2025
(USD in Thousands, except per share data) | ||||||||||||||||||||||||||
Cactus, Inc. (Historical) | Baker Hughes Pressure Control LLC ("SPC") (Historical) | Transaction Accounting Adjustments (Note 5) | Notes | Pro Forma Combined for Transaction Accounting Adjustments | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Product revenue | 624,045 | 356,000 | - | 980,045 | ||||||||||||||||||||||
Rental revenue | 66,269 | - | - | 66,269 | ||||||||||||||||||||||
Field service and other revenue | 127,534 | 113,000 | - | 240,534 | ||||||||||||||||||||||
Total revenues | 817,848 | 469,000 | - | 1,286,848 | ||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||
Cost of product revenue | 368,560 | 258,000 | 9 | AA | 626,569 | |||||||||||||||||||||
Cost of rental revenue | 37,336 | - | - | 37,336 | ||||||||||||||||||||||
Cost of field service and other revenue | 107,096 | 66,000 | 6 | AA | 173,102 | |||||||||||||||||||||
Selling, general and administrative expenses | 114,205 | 40,000 | 9 | AA | 172,098 | |||||||||||||||||||||
10,384 | BB | |||||||||||||||||||||||||
7,500 | GG | |||||||||||||||||||||||||
Total costs and expenses | 627,197 | 364,000 | 17,908 | 1,009,105 | ||||||||||||||||||||||
Operating income | 190,651 | 105,000 | (17,908) | 277,743 | ||||||||||||||||||||||
Interest income, net | 7,820 | - | - | 7,820 | ||||||||||||||||||||||
Other income (expense), net | 221 | (5,000) | - | (4,779) | ||||||||||||||||||||||
Income before income taxes | 198,692 | 100,000 | (17,908) | 280,784 | ||||||||||||||||||||||
Income tax expense | 45,352 | - | 20,523 | EE | 65,875 | |||||||||||||||||||||
Net income | 153,340 | 100,000 | (38,431) | 214,909 | ||||||||||||||||||||||
Less: net income attributable to non-controlling interest | 27,164 | 4,000 | 5,301 | FF | 56,614 | |||||||||||||||||||||
20,149 | HH | |||||||||||||||||||||||||
Net income attributable to Cactus Inc. | 126,176 | 96,000 | (63,881) | 158,295 | ||||||||||||||||||||||
Earnings per Class A share - basic | $ | 1.84 | $ | 2.31 | ||||||||||||||||||||||
Earnings per Class A share - diluted | $ | 1.83 | $ | 2.30 | ||||||||||||||||||||||
Weighted average Class A shares outstanding - basic | 68,465 | 68,465 | ||||||||||||||||||||||||
Weighted average Class A shares outstanding - diluted | 68,877 | 68,877 | ||||||||||||||||||||||||
See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||
5
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
For the year ended December 31, 2024
(USD in Thousands, except per share data) | ||||||||||||||||||||||||||
Cactus, Inc. (Historical) | Baker Hughes Pressure Control LLC ("SPC") (Historical) | Transaction Accounting Adjustments (Note 5) | Notes | Pro Forma Combined for Transaction Accounting Adjustments | Notes | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Product revenue | 852,265 | 369,000 | - | 1,221,265 | ||||||||||||||||||||||
Rental revenue | 101,785 | - | - | 101,785 | ||||||||||||||||||||||
Field service and other revenue | 175,764 | 134,000 | - | 309,764 | ||||||||||||||||||||||
Total revenues | 1,129,814 | 503,000 | - | 1,632,814 | ||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||
Cost of product revenue | 496,888 | 280,000 | 508 | AA | 805,552 | |||||||||||||||||||||
28,156 | CC | |||||||||||||||||||||||||
Cost of rental revenue | 54,448 | - | - | 54,448 | ||||||||||||||||||||||
Cost of field service and other revenue | 142,085 | 71,000 | 331 | AA | 213,416 | |||||||||||||||||||||
Selling, general and administrative expenses | 130,462 | 54,000 | 527 | AA | 218,551 | |||||||||||||||||||||
19,735 | BB | |||||||||||||||||||||||||
3,827 | DD | |||||||||||||||||||||||||
10,000 | GG | |||||||||||||||||||||||||
Change in fair value of earn-out liability | 16,318 | - | - | 16,318 | ||||||||||||||||||||||
Total costs and expenses | 840,201 | 405,000 | 63,084 | 1,308,285 | ||||||||||||||||||||||
Operating income | 289,613 | 98,000 | (63,084) | 324,529 | ||||||||||||||||||||||
Interest income, net | 6,459 | - | - | 6,459 | ||||||||||||||||||||||
Other income (expense), net | 3,204 | (5,000) | - | (1,796) | ||||||||||||||||||||||
Income before income taxes | 299,276 | 93,000 | (63,084) | 329,192 | ||||||||||||||||||||||
Income tax expense | 66,518 | - | 7,479 | EE | 73,997 | |||||||||||||||||||||
Net income | 232,758 | 93,000 | (70,563) | 255,195 | ||||||||||||||||||||||
Less: net income attributable to non-controlling interest | 47,351 | 4,000 | 1,980 | FF | 59,784 | |||||||||||||||||||||
6,453 | HH | |||||||||||||||||||||||||
Net income attributable to Cactus Inc. | 185,407 | 89,000 | (78,996) | 195,411 | ||||||||||||||||||||||
Earnings per Class A share - basic | $ | 2.79 | $ | 2.94 | ||||||||||||||||||||||
Earnings per Class A share - diluted | $ | 2.77 | $ | 2.93 | ||||||||||||||||||||||
Weighted average Class A shares outstanding - basic | 66,393 | 66,393 | ||||||||||||||||||||||||
Weighted average Class A shares outstanding - diluted | 79,915 | 66,776 | II | |||||||||||||||||||||||
See accompanying notes to unaudited pro forma condensed combined financial information. | ||||||||||||||||||||||||||
6
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note 1. Description of the Transaction
On January 1, 2026, pursuant to the Framework Agreement dated June 2, 2025 and an Amended and Restated Limited Liability Company Agreement dated January 1, 2026, Cactus, Inc. completed the acquisition of 65% of the membership interests in SPC from Baker Hughes Pressure Control Holdings LLC and certain of its affiliates. The aggregate purchase consideration was $382.0 million, consisting of $371.0 million in cash paid at closing, funded with cash on hand, and deferred consideration payable in accordance with the Framework Agreement. As a result of the Transaction, Cactus obtained a controlling financial interest in SPC.
Refer to “Note 3. Estimated Purchase Price Consideration and Preliminary Allocation” of the unaudited pro forma condensed combined financial information for the purchase price consideration calculation.
Note 2. Basis of Presentation
The accompanying unaudited pro forma condensed combined financial information and related notes were prepared pursuant to Article 11 of SEC Regulation S-X.
The unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2025, and the year ended December 31, 2024, combine the historical consolidated statements of income of Cactus and the historical special purpose statements of revenues and direct expenses of SPC, giving effect to the Transaction as if it had been completed on January 1, 2024. The accompanying unaudited pro forma condensed combined balance sheet as of September 30, 2025, combines the historical consolidated balance sheets of Cactus and the historical special purpose statement of assets acquired and liabilities assumed of SPC, giving effect to the Transaction as if it had been completed on September 30, 2025.
Both Cactus’ financial statements and SPC’s special purpose financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars. The special purpose financial statements have been prepared to reflect the assets acquired and liabilities assumed by the Company in accordance with the Transaction and include costs directly associated with producing revenue, including a reasonable allocation of certain direct expenses, and exclude expenses not directly involved in revenue producing activities, such as corporate overhead unrelated to the operational activities, interest, and income tax expense. Therefore, the special purpose financial statements are not intended to be a complete presentation of the financial position or results of operations of the business in conformity with U.S. GAAP. The special purpose financial statements are not indicative of the financial condition or results of operations of SPC on a go-forward and stand-alone basis.
The pro forma adjustments presented in this unaudited pro forma condensed combined financial information represent management’s preliminary estimates based on information available as of the date of the Form 8-K/A and such estimates are subject to revision as further information is obtained. Accordingly, the pro forma adjustments for the Transaction are preliminary and subject to further adjustment as additional information becomes available and the various analyses and other valuations are performed. Any adjustments may have a significant effect on the unaudited pro forma condensed combined financial information presented herein and such adjustments may be significant.
The assumptions underlying the pro forma adjustments are described in the accompanying notes to this unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information may not be indicative of Cactus’ future performance and does not necessarily reflect what Cactus’ financial position and results of operations would have been had this transaction occurred at the beginning of the period presented.
Further, the unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of Cactus following the completion of the Transaction. Additionally, the unaudited pro forma condensed combined financial information does not reflect any revenue enhancements, anticipated synergies, operating efficiencies, or cost savings that may be achieved related to the Transaction, nor does it reflect any costs or expenditures that may be required to achieve any possible synergies.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Cactus will finalize the accounting for the Transaction as soon as practicable within the measurement period, but in no event later than one year from the Transaction Date, in accordance with ASC 805.
The accounting policies used in the preparation of the unaudited pro forma condensed combined financial information are those described in Cactus' audited consolidated financial statements as of and for the year ended December 31, 2024, and subsequent unaudited interim periods. Cactus performed a preliminary review of SPC’s accounting policies to determine whether any adjustments were necessary to ensure comparability in the unaudited pro forma condensed combined financial information.
Currently, the Company is not aware of any material differences between the accounting policies of the Company and SPC that would continue to exist subsequent to the application of acquisition accounting.
Balance sheet reclassifications
Financial statement line-item descriptions have been revised to conform to Cactus presentation, as well as the following reclassification:
(a) Cactus deferred revenue was reclassified from Accrued expenses and other current liabilities to Progress collections and deferred income
Note 3. Estimated Purchase Price Consideration and Preliminary Allocation
Purchase Price Consideration
The estimated preliminary purchase price consideration transferred or estimated to be transferred for the Transaction is approximately $382.0 million. The following table summarizes the components of the preliminary purchase price consideration reflected in the unaudited pro forma condensed combined financial information:
(in thousands) | ||||||||
Purchase Price Consideration | ||||||||
Cash (1)(2) | $ | 371,011 | ||||||
Add: Deferred Payment (3) | 11,034 | |||||||
Fair value of consideration transferred or estimated to be transferred (g) | $ | 382,045 | ||||||
(1) The cash consideration was funded utilizing cash on hand of $371.0 million.
(2) The total cash consideration transferred is subject to a potential working capital adjustment.
(3) Represents the estimated fair value of our deferred consideration payment of $11.0 million, discounted at present value and payable to the Seller on the first anniversary of the Transaction Date.
Preliminary Allocation of Purchase Price Consideration to Assets Acquired and Liabilities Assumed
The fair values of the assets and liabilities in the unaudited pro forma condensed combined financial information are based upon a preliminary assessment of fair value and may change when the final valuation of assets acquired, and liabilities assumed has been prepared, as well as working capital settlements are made. Valuation assessments of specifically identifiable tangible and intangible assets, including the determination of their economic useful lives, have been performed based on currently available information and assumptions as of the Transaction Date; however, these assessments remain preliminary and subject to change during the measurement period.
Cactus expects to finalize the purchase price allocation as soon as practicable, but no later than one year from the Transaction Date. As such, the purchase price allocation may change. There can be no assurance that such revisions will not result in material changes.
8
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The preliminary allocation of the purchase price consideration is as follows:
(in thousands) | |||||
Cash and cash equivalents | $ | 70,000 | |||
Inventories | 146,156 | ||||
Accounts receivable | 221,000 | ||||
Prepaid expenses and other current assets | 2,000 | ||||
Total Current assets | $ | 439,156 | |||
Property and equipment | 46,324 | ||||
Intangible assets | 190,200 | ||||
Contract and other deferred assets | 13,000 | ||||
Other noncurrent assets | 25,000 | ||||
Total assets acquired (a) | $ | 713,680 | |||
Total Current liabilities | 182,000 | ||||
Deferred tax liability | 47,386 | ||||
Employee related liabilities | 11,000 | ||||
Other noncurrent liabilities | 19,000 | ||||
Total liabilities assumed (b) | $ | 259,386 | |||
Net identifiable assets acquired (c) = (a) - (b) | $ | 454,294 | |||
Fair value of the mezzanine classified non-controlling interest (d) | 150,036 | ||||
Fair value of the other non-controlling interest (e) | 17,464 | ||||
Goodwill (f) | 95,251 | ||||
Total consideration to be transferred (g) = (c) - (d) - (e) + (f) | $ | 382,045 | |||
Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2025
As stated above, the unaudited pro forma condensed combined balance sheet as of September 30, 2025 is prepared as if the Transaction had occurred on September 30, 2025 and combines the historical balance sheet of Cactus as of September 30, 2025, with SPC’s historical special purpose statement of assets acquired and liabilities assumed as of September 30, 2025.
A. Cash and Cash Equivalents – Purchase Consideration
Reflects a decrease in cash and cash equivalents of $371.0 million, which relates to payment of the purchase consideration.
B. Cash and Cash Equivalents – Minimum Cash
Reflects the cash acquired by taking a controlling interest in the newly formed joint venture as of the Closing Date. As part of the Transaction, the joint venture was required to retain minimum cash of $70.0 million (the “Minimum Cash Amount”). The adjustment presents the cash held at Closing in accordance with this requirement and the related purchase consideration structure.
C. Inventory Step-up Adjustment
Reflects a $28.2 million increase to the inventory balance to recognize the step‑up to fair value for the inventory acquired as of the Transaction Date.
D. Property and Equipment
Represents an adjustment of approximately $15.3 million to SPC's historical property and equipment balances to record the preliminary estimated fair value.
9
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
E. Intangible Assets
Reflects the adjustment to record the fair value of intangible assets acquired in the Transaction to their estimated fair value of $190.2 million. The preliminary fair value assigned to the acquired intangible assets and their estimated useful lives are as follows:
(in thousands) | Estimated useful life | Preliminary fair value | ||||||
Backlog | 1.0 year | $ | 5,890 | |||||
Developed technology | 10.0 years | 46,720 | ||||||
Customer relationships | 15.0 years | 137,590 | ||||||
Total identifiable intangible assets and pro forma adjustment | $ | 190,200 | ||||||
The estimated calculations of fair value for the identified acquired intangible assets are determined primarily through the use of the income valuation approach.
F. Stockholders’ Equity
Reflects the adjustment to equity to eliminate SPC's historical assets in excess of liabilities of $209.0 million, which included the equity related to both controlling and non-controlling interest. The fair value of the non-controlling interest related to a subsidiary of SPC is adjusted in Note H.
G. Accrued Expenses and Other Current Liabilities
Represents the accrual for estimated additional non-recurring transaction related costs of $3.8 million, primarily consisting of professional fees, not reflected in the historical financial information and estimated to be incurred by the Company subsequent to September 30, 2025.
H. Non-Controlling Interest
Reflects the fair value of non-controlling interest of $17.5 million related to a SPC subsidiary partially owned by a third party. The balance of the non-controlling interest result from anticipated changes in ownership interests in subsidiaries that are not wholly-owned.
I. Deferred Taxes
In connection with the Transaction the Company will record a deferred tax liability of $47.4 million, with a corresponding adjustment to goodwill. The adjustment was calculated on the incremental step up to fixed assets and intangible assets using the local country statutory tax rate.
J. Refund Remittance Liability
Cactus has recorded an refund remittance liability of $11.0 million as part of the preliminary purchase accounting as an offset to Accounts Receivable reflected on the balance sheet. The refund remittance liability to the Seller reflects the expected refund in Mexico in connection with value added tax and will be adjusted as additional information becomes available. For purposes of this unaudited pro forma condensed combined financial information, the refund remittance liability is assumed to remain outstanding and classified as current liability until the underlying matters are resolved.
K. Mezzanine Equity
Reflects the classification of Baker Hughes Pressure Control Holdings LLC’s 35% ownership interest in SPC as mezzanine equity, as certain redemption features are not solely within the Company’s control. The adjustment records the estimated fair value of non-controlling interests as mezzanine equity in the amount of $150.0 million as of the Transaction Date.
10
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
L. Goodwill
Reflects the net increase in goodwill, representing the excess of the purchase consideration over the fair value of SPC’s net assets acquired, based on the estimated preliminary purchase price allocation. The estimated goodwill to be recognized is attributable primarily to expanded international market opportunities, increased product diversification and increased exposure to additional end-market streams. The goodwill created in the transaction is not expected to be deductible for tax purposes and is subject to material revision as the purchase price allocation is completed.
Note 5. Adjustments to Unaudited Pro Forma Condensed Combined Income Statements
The following describes the adjustments to the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2025, and fiscal year ended December 31, 2024:
AA. Depreciation Expense
Represents a net increase in depreciation expense on a straight-line basis of $24.0 thousand and $1.4 million, based on the preliminary step-up in fair value of the property and equipment and the respective assigned estimated useful lives for the nine months ended September 30, 2025, and twelve months ended December 31, 2024, respectively.
The total increase in depreciation expense for the periods presented is the following:
(in thousands) | For the nine months ended September 30, 2025 | For the twelve months ended December 31, 2024 | ||||||
Cost of product revenue | $ | 9 | $ | 508 | ||||
Cost of field service and other revenue | 6 | 331 | ||||||
Selling, general and administrative expenses | 9 | 527 | ||||||
Pro forma adjustment | $ | 24 | $ | 1,366 | ||||
BB. Intangibles Amortization Expense
Represents the pro forma adjustment to record amortization expense of $10.4 million and $19.7 million, for the nine months ended September 30, 2025, and twelve months ended December 31, 2024, respectively, based on the preliminary fair value of identified intangible assets.
CC. Inventory Step-up Adjustment
Represents the additional cost of product revenue recognized in connection with the step-up of inventory to preliminary fair value. Cactus will recognize the increased value of inventory in cost of product revenue as the inventory is sold, which for purposes of this unaudited pro forma condensed combined financial information is assumed to occur within 12 months, based on the average historical inventory turnover, after the Transaction Date.
DD. Transaction Costs
Represents non-recurring transaction expenses of $3.8 million that are estimated to be incurred by Cactus subsequent to the nine-month period ended September 30, 2025 and not already included in historical financial statements. The historical financial statements for the nine-month period ended September 30, 2025 include $7.1 million of non-recurring transaction expenses.
EE. Provision for Income Taxes
Reflects an adjustment to income tax expense related to the pre-tax pro forma adjustments to the income statement. The tax-related adjustments are based on an estimated tax rate of 25%. This adjustment also reflects a recalculation of SPC’s income tax expense to reflect the ownership structure resulting from the transaction. SPC will be treated as a disregarded entity under partnership rules for U.S. federal and state income tax purposes.
FF. Non-controlling Interest
Reflects changes in the pro forma income attributable to non-controlling interests due to the Transaction Accounting Adjustments presented herein based on the applicable Cactus, Inc. pro forma ownership for the periods presented.
11
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
GG. Transition Service Costs
Under the Transition Service Agreement (“TSA”), the Seller will provide SPC certain services on a transitional basis post-closing of the Transaction, including IT applications and support, finance, real estate, and commercial support, resulting in an increase in selling, general and administrative expense. The adjustments to selling, general and administrative expense are based on historical service cost estimates plus the agreed-upon incremental markup under the TSA. The services to be provided under the TSA range from 1 to 24 months post-closing of the Transaction (with certain extension rights as provided therein). Pro forma adjustments reflect the additional expense related to the TSA, which was not recorded in SPC’s historical special purpose financial statements.
The total increase in Selling, general and administrative expense for the periods presented is the following:
(in thousands) | For the nine months ended September 30, 2025 | For the twelve months ended December 31, 2024 | ||||||
Variable costs | $ | 1,875 | $ | 2,500 | ||||
Fixed costs | 5,625 | 7,500 | ||||||
Pro forma adjustment | $ | 7,500 | $ | 10,000 | ||||
HH. Mezzanine equity
Reflects changes in the pro forma income attributable to mezzanine equity due to the Transaction Accounting Adjustments presented herein based on the applicable Cactus, Inc. pro forma ownership for the periods presented.
II. Earnings per Share
Diluted earnings per share for the twelve months ended December 31, 2024 excludes 13.5 million weighted average shares of Class B common stock as the effect would be anti-dilutive.
12
FAQ
What transaction does Cactus (WHD) detail in this 8-K/A amendment?
The amendment details Cactus’ acquisition of 65% of Baker Hughes Pressure Control LLC, the Surface Pressure Control business. It adds historical special purpose financial statements and unaudited pro forma combined financials to show how the joint venture would affect Cactus’ balance sheet and income.
How much did Cactus pay for the 65% SPC interest described in the filing?
Cactus reports aggregate purchase consideration of $382.0 million for the 65% SPC stake, including $371.0 million in cash paid at closing and $11.0 million of deferred consideration. The cash portion was funded from cash on hand, and the amount is subject to potential working capital adjustment.
What revenues did the SPC business contribute before joining Cactus (WHD)?
The SPC business recorded $503 million of revenue in 2024 and $469 million for the nine months ended September 30, 2025. These figures come from special purpose statements of revenues and direct expenses and illustrate the scale of the business being consolidated into Cactus’ results.
What intangible assets and goodwill arise from Cactus’ SPC acquisition?
Cactus preliminarily assigns $190.2 million of identifiable intangibles to SPC, mainly customer relationships, developed technology and backlog, with useful lives up to 15 years. It also records $95.3 million of goodwill, reflecting expected benefits like expanded markets and product diversification after the transaction.
How is Baker Hughes’ remaining 35% SPC stake reflected after the deal?
Baker Hughes’ 35% ownership interest in the joint venture is recorded as mezzanine equity of $150.0 million. This classification reflects redemption features not solely within Cactus’ control and sits between liabilities and equity on the pro forma combined balance sheet presented in the amendment.
What major pro forma adjustments affect Cactus’ post-SPC earnings profile?
Key pro forma adjustments include higher depreciation from stepped‑up property and equipment, $10.4–$19.7 million of annual intangible amortization, a $28.2 million inventory step‑up flowing through cost of product revenue, transition service expenses under a TSA, and associated income tax effects at a 25% rate.
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3.36B
68.12M
Oil & Gas Equipment & Services
Oil & Gas Field Machinery & Equipment
United States
HOUSTON