Baker Hughes Acquires Tanroc - Analyst Blog

Baker Hughes Inc. (BHI) acquired oilfield equipment and service supplier Tanroc, which served as the Canadian distributor for the company's LIFTEQ systems prior to its acquisition.

Primarily based in Lloydminster, Alberta, Canada, Tanroc facilitated in the supply of progressing cavity pumping (PCP) systems, surface production equipment, as well as variable frequency drives for downhole pumping systems and wellhead drives.

Tanroc provided service, repair and distribution for PCP systems in Canada from its main facility in Lloydminster, along with its smaller service centers in Bonnyville and Wabasca, Alberta.

The Tanroc acquisition will serve as a key driver of Baker's earnings and will enrich its LIFTEQ line of PCP systems, accomplish its service as well as create a proper distribution channel for the company's PCP products in the Canadian market.

Previously, Baker Hughes had acquired 100% of the outstanding common stock of BJ Services Company in a cash and stock transaction valued at $6,897 million. BJ Services is a leading provider of pressure pumping and other oilfield services that expands the portfolio of Baker Hughes.

One of the largest oilfield service companies in the world, Baker Hughes is dynamic in plugging holes in its product line-up through bolt-on acquisitions. Among the diversified oilfield service players, Baker Hughes is one of the best positioned, with significant improvement in activity levels recorded in North America and internationally. Additionally, we believe that the company's solid balance sheet, clear credit rating and sufficient liquidity will help address its operational and corporate needs.

We remain cautious on the issues related to the Gulf of Mexico activity levels and geographical reorganization as well as integration of BJ Services operations. We keep our Zacks Rank #3 (short-term 'Hold' rating) for Baker while maintaining our Neutral recommendation for the long term.

 
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