Flowserve Corporation has reached an agreement to transfer BW/IP - New Mexico, Inc., its wholly owned subsidiary that holds asbestos liabilities and related insurance assets, to an affiliate of Acorn Investment Partners, a portfolio company of funds managed by Oaktree Capital Management. Upon closing, expected in the fourth quarter of 2025, Acorn will assume full responsibility for all current and future asbestos-related claims associated with the acquired liabilities. Flowserve will contribute $199 million in cash, with Acorn adding $20 million, capitalizing BW/IP with a total of approximately $219 million in cash. The transaction will permanently remove these asbestos liabilities, related insurance assets, and associated deferred tax assets from Flowserve's consolidated balance sheet, resulting in a one-time estimated loss of about $135 million in the fourth quarter of 2025. The company expects the transaction to improve annual free cash flow by approximately $15 million to $20 million and enhance its flexibility for future strategic growth opportunities.