Ingersoll Rand will retain 45% equity stake in HPS Segment. Credit: Terry McGraw from Pixabay.

Private equity firm American Industrial Partners (AIP) has agreed to acquire Ingersoll Rand’s majority interest in High Pressure Solutions (HPS) Segment for approximately $300m.

Upon the completion of the deal, Ingersoll Rand will retain a 45% common equity interest in HPS Segment.

The transaction is planned to be completed in the first half of 2021, subject to customary closing conditions.

Ingersoll Rand CEO Vicente Reynal said: “Today’s transaction is a meaningful step forward in our transformation and achieves many of the goals we have previously communicated.

“It significantly reduces our direct exposure to the upstream oil and gas market to non-material revenue exposure of <2%, and accelerates our ESG commitments.

“We are pleased to achieve an attractive valuation for our shareholders with the opportunity to continue to benefit from future economic upside, and secure significant upfront cash that we will use to support growth.

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“After a successful year during 2020 despite the pandemic, we now enter the next phase of our journey with a portfolio focused on core, higher-growth, sustainability-oriented industrial markets, including water, life sciences, and renewable energy, supported by strong secular trends.”

AIP said it intends to acquire HPS due to its position as a premier market leader in the manufacturing, service, and repair of high-pressure pumps and related consumables in the upstream energy market.

The deal allows HPS to focus its efforts on serving its customers in the upstream oilfield service sector while delivering highly-engineered and efficient, customer-driven solutions to meet the evolving market needs.

AIP partner Alex Menkhaus said: “We are excited to partner with the team at HPS to advance the company’s storied history of innovation and commercialisation of technologies that enable efficient energy production.”