Nov 29 Baker Hughes Inc said it has
reached an agreement with CSL Capital Management and Goldman
Sachs Group Inc's merchant banking division to create a
hydraulic fracturing company in which Baker Hughes will own a
46.7 percent stake.
Under terms of the agreement, oilfield services provider
Baker Hughes will contribute its North American land cementing
and hydraulic fracturing businesses, which comprises of assets
in the United States and Canada.
The agreement does not include Baker Hughes' international
pressure pumping businesses or its Gulf of Mexico offshore
pressure pumping operations, which it will continue to operate.
Upon closing, private equity firm CSL Capital Management
will contribute its Allied Energy Services platform to the new
company, which provides hydraulic fracturing and cementing
services on land in North America.
CSL Capital Management and Goldman Sachs's West Street
Energy Partners (WSEP) will together own 53.3 percent of the
privately-held new company, and contribute $325 million in cash.
About $175 million will be used to strengthen the balance
sheet of the new company, while the remaining $150 million will
go to Baker Hughes.
The new company will operate under the Baker Hughes-owned BJ
Services brand and will be headquartered in Tomball, Texas.
Warren Zemlak, who is the current president & CEO of Allied
Energy Services, will head the new company.
Wells Fargo Securities LLC served as Baker Hughes' financial
(Reporting by Ahmed Farhatha in Bengaluru; Editing by Shounak