Ingersoll Rand Inc has entered into an agreement to sell a majority interest in its High Pressure Solutions (HPS) segment to the US private equity firm American Industrial Partners (AIP).

The HPS segment represents substantially all of Ingersoll Rand’s exposure to upstream oil and gas.

Ingersoll Rand will receive cash proceeds of approximately US$300 million when the deal closes and will retain a 45% common equity interest in the business.

“Today’s transaction is a meaningful step forward in our transformation and achieves many of the goals we have previously communicated,” said Vicente Reynal, CEO of Ingersoll Rand. “It significantly reduces our direct exposure to the upstream oil and gas market to non-material revenue exposure of <2%, and accelerates our ESG (environmental, social and governance) commitments.”

“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,” added Reynal.

The transaction is expected to close in the first half of 2021.