Baker Hughes, a GE company (BHGE), has agreed to sell its Natural Gas Solutions (NGS) business to two separate entities for a combined value of US$375 million.
First Reserve, a global private equity investment firm, will purchase Dresser Natural Gas Solutions (Dresser NGS), a global original equipment manufacturer of commercial and industrial natural gas meters and pipeline repair products. Originally founded as a core business unit of Dresser Inc., Dresser NGS has approximately 450 employees located in eight countries, including three manufacturing sites in North America and the United Kingdom. Dresser NGS has 43 registered trademarks and more than 100 active patents or patent filings around the world.
Dresser NGS’ equipment serves diverse energy end-markets, including the gas distribution utility, midstream, and petrochemical industries. First Reserve previously owned the business when it was part of Dresser Inc., a former First Reserve portfolio company which was sold to GE in 2011.
“Our investment in Dresser NGS represents a continuation of First Reserve’s thematic approach to investments targeting the asset integrity sector,” said Jeff Quake, Managing Director of First Reserve. “With our previous knowledge of the business and global network, we are excited to help Dresser NGS grow market share and continue to deliver advanced solutions for its suite of blue-chip utility and other midstream customers. We believe Dresser NGS has a resilient business model, a leading brand, and a global footprint which position the company well for the future.”
In a separate transaction, BHGE has agreed to sell the Talamona branch of its NGS product line to Pietro Fiorentini S.p.A. The transaction includes the transfer of approximately 40 employees and a manufacturing site in Talamona, Italy. Pietro Fiorentini manufactures pressure regulators and valves, as well as pressure reducing and metering systems, for the natural gas industry.
“We’re continuously evaluating our portfolio to maximize value for all stakeholders,” said BHGE Chairman and CEO Lorenzo Simonelli. “We have found the right buyers for the NGS business, at an attractive valuation. We know our customers and employees are in good hands with both First Reserve and Pietro Fiorentini. Going forward, we will continue to evaluate our portfolio to best deliver for our customers and achieve our financial priorities of expanding margins, increasing market share and outperforming on cash generation.”
Both transactions are expected to close in the second half of 2018, subject to customary closing conditions and appropriate regulatory approvals.
BHGE was formed just over a year ago through the merger of Baker Hughes Inc. and GE Oil & Gas. The combined entity has four product companies — Oilfield Services, Oilfield Equipment, Turbomachinery & Process Solutions, and Digital Solutions. NGS is part of BHGE’s Turbomachinery & Process Solutions segment.