Evolution continues: Hexagon buys Waygate

Hexagon continues its reinvention — the PPM spin-off, Octave, won’t be complete until May, in all likelihood — today announcing the acquisition of Waygate Technologies for $1.45 billion in cash (about €1.24 billion), in a carve-out from Baker Hughes. Waygate had revenue of around $630 million in 2025, so this is a 2.3ish revenue multiple. Note that this is mostly a hardware deal, so don’t expect software multiples.

Waygate makes computed tomography, radiography, and remote visualization (in the inspection sense, not hidden line removal) products. Adding these capabilities to Hexagon’s Manufacturing Intelligence division enables it to expand into non-destructive testing (NDT). Waygate operates in four divisions: Remote Visual (surface) Inspection, with revenue of $148 million in 2025; Radiography (internal part inspection), with revenue of $183 million; Imaging Solutions (industrial X-ray), with revenue of $207 million; and Ultrasonic (flaw detection), with revenue of $93 million.

Hexagon CEO Anders Svensson told investors that Waygate is “the world’s leading NDT platform, and is the global #1 in Remote Visual Inspection and in the  top two in industrial Computed Tomography (CT) – both in growing, regulated markets.” He cited Waygate’s” deeply embedded customer relationships in aerospace and advanced manufacturing” as crucial to building an integrated solution across that takes Hexagon “into Maintenance, Repair & Operations (MRO) markets with recurring, utilization-driven demand”.

Hexagon intends to cross-sell CT and Metrology products into the combined customer base and to review the other Waygate divisions (Imaging Solutions and Ultrasonic Testing) with a view to improving operations and/or conducting a “strategic review” (which often means selling those parts of the business to others).

Waygate’s profitability was around 10% in fiscal 2025, below Hexagon’s (~27%), so it’s not clear whether the acquisition will be immediately accretive to Hexagon — hence the caution around some of the divisions. Mr. Svensson said that he sees Hexagon driving growth in the Remove Visual Inspection business because of its safety-critical positioning in aircraft jet engine blade inspection with patented IP and other significant barriers to entry for competitors. He also sees the opportunity to improve profitability in  Radiology, the part of Waygate that integrates directly with Hexagon’s Volume Graphics CT analysis software.

For the other two businesses, Imaging and Ultrasonic, Mr. Svensson said, “These are still very good assets. We will look into these assets to see, do we have a performance issue? Is it a market position issue, or is it a strategic fit issue? And then we will decide if we will do turnarounds, if we will do further bolt-on acquisitions to become the number one or number two in [these] market, or if [we should] do some other strategic reviews.”

Bottom line: Baker Hughes is a massive oilfield services company that’s also reinventing itself. The sale of Waygate is part of a program to, as CEO Lorenzo Simonelli puts it, “sharpen our focus on rotating equipment, flow control, digital, production optimization and decarbonization” in a pivot to cleaner energy and higher growth. Hexagon acquires assets that complement its existing measurement and metrology businesses, giving them more to sell to the aerospace, automotive, and energy sectors — and the opportunity to “materially improve” (or sell off) the parts of Waygate below Hexagon’s margin levels.

Investors seem to be taking a wait-and-see attitude, with Hexagon’s share price essentially flat on the news — perhaps they’re confident in Hexagon’s ability to integrate Remote Visual Inspection but need to see margin improvements before declaring this deal a good idea.

The deal is expected to close in the second half of 2026, pending regulatory approvals.