Company: Baker Hughes (BKR)
Business: Baker Hughes is an energy technology company with a portfolio of technologies and services that span the energy and industrial value chain. The company operates in two segments: oilfield services and equipment and industrial and energy technology. The OFSE segment provides products and services for onshore and offshore oilfield operations across the lifecycle of a well, ranging from exploration, appraisal, and development, to production, rejuvenation, and decommissioning. OFSE is organized into four product lines: well construction; completions, intervention and seasurements; production solutions and subsea and surface pressure systems. The IET segment provides technology solutions and services for mechanical-drive, compression and power-generation applications across the energy industry, including oil and gas, liquefied natural gas operations, downstream refining and petrochemical markets, as well as lower carbon solutions to broader energy and industrial sectors.
Stock Market Value: $47.84 billion ($48.48 per share)
Activist: Ananym Capital Management
Ownership: n/a
Average Cost: n/a
Activist Commentary: Ananym Capital Management is a New York-based activist investment firm which launched on Sept. 3, 2024, and is run by Charlie Penner (a former partner at JANA Partners and head of shareholder activism at Engine No. 1) and Alex Silver (a former partner and investment committee member at P2 Capital Partners). Ananym looks for high quality but undervalued companies, regardless of industry. They would prefer to work amicably with their portfolio companies but are willing to resort to a proxy fight as a last resort. According to their most recent 13F filing, they manage $260 million across 10 positions.
What’s happening
On Oct. 21, Ananym Capital announced that they have taken a position in Baker Hughes and are calling on the company to spin out its oilfield services and equipment business, arguing such a step could help push up the stock price by at least 60%.
Behind the scenes
Baker Hughes is a leading provider of energy and industrial technology services. The company was formed through the 2017 merger of legacy Baker Hughes and GE Oil & Gas, combining best-in-class intellectual property shared by GE spinoff assets and the technical expertise from both organizations.
The company operates through two primary segments: industrial and energy technologies and oilfield services and Equipment. The IET unit (55% of projected 2025 revenue and 60% of projected 2025 EBITDA) is a long-cycle industrial and energy business focused on gas technology equipment, including turbines and compressors, and aftermarket services, including new energy applications. The OFSE unit (45%/40%) is a short-cycle oilfield equipment and production services business with an end-to-end portfolio of oilfield services and equipment for well construction and production.
Management has built up a strong track record of effective execution, and that…
Read More: Activist Ananym Capital sees upside if Baker Hughes spins off oil services
