On Jan 2, 2025, Cactus, Inc. WHD announced that it completed the acquisition of a 65% stake in the Surface Pressure Control (SPC) business of Baker Hughes Company BKR, with BKR retaining just 35%, forming a new joint venture (JV).
The deal was initiated on June 2, 2025. BKR estimated the enterprise value of its SPC business to be $530 million, assuming that SPC has no debt and no excess cash on its balance sheet. Cactus paid $344.5 million to acquire the 65% stake in SPC.
Two years following the deal closure, Cactus can opt to buy the outstanding 35% stake or Baker Hughes has the right to require Cactus to do the same.
Following the acquisition, Cactus has diversified its global oilfield equipment footprint and now owns a controlling stake in the newly formed JV with BKR, strengthening WHD’s business model with additional cash flow and resulting in increased investor appeal.
WHD currently sports a Zacks Rank #1 (Strong Buy), whereas BKR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Halliburton Company HAL and Core Laboratories Inc. CLB are two other players in the oil and gas equipment and service Industry. Like BKR and WHD, the business models of HAL and CLB are vulnerable to crude price fluctuations. HAL and CLB currently carry a Zacks Rank #3 each.
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Halliburton Company (HAL): Free Stock Analysis Report Core Laboratories Inc. (CLB): Free Stock Analysis Report Baker Hughes Company (BKR): Free Stock Analysis Report Cactus, Inc. (WHD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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