GE last Monday announced that it has signed an agreement to sell its Distributed Power business to Advent International, one of the largest and most experienced global private equity investors, for $3.25 billion. The transaction includes Distributed Power’s Jenbacher and Waukesha engines, as well as manufacturing sites in Austria, Canada and the U.S.
GE has been shedding assets. In late May of this year, GE announced it had agreed to sell its locomotive division, GE Transportation, to Wabtec in a deal valued at roughly $11.1 billion.
Distributed Power, a business unit of GE Power, is a leading provider of reciprocating gas engines, power equipment and services focused on power generation and gas compression at or near the point of use. Distributed Power offers a diverse product portfolio that includes highly efficient, fuel-flexible, industrial gas engines generating 200 kW to 10 MW of power for numerous industries globally. With approximately 3,000 employees and three main facilities located in Austria, the U.S. and Canada, Distributed Power has delivered more than 48,000 Jenbacher and Waukesha reciprocating gas engines to customers around the world.
Carlos Lange, President of Distributed Power, said, “In Advent, we have a partner that shares our team’s passion for delivering outstanding customer outcomes. Our Jenbacher and Waukesha brands and engines are recognized all over the world for their performance and reliability, and Advent’s deep sector expertise will allow us to further strengthen our capabilities for the benefit of our worldwide customers. Advent will help accelerate our growth as we continue to execute on our priorities.”
“Distributed Power is a terrific asset with highly regarded engines that are the go-to OEM for the efficient generation of electrical power and heat as well as gas compression,” said Ranjan Sen, Managing Partner at Advent International. “The business has significant growth potential on a global scale and talented employees all over the world. We plan to invest substantially in critical areas such as the product portfolio, service network and digitization to support Distributed Power in sustainably strengthening its market position.”
“GE Power will continue to invest in developing the energy technologies of the future and improving the power networks we depend on today. This transaction not only accelerates our reinvestment in our business, but also enables Distributed Power to be best positioned to pursue its growth strategy,” said Russell Stokes, President and Chief Executive Officer of GE Power.
GE Power, which generates one-third of the world’s electricity, is a leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. Its technology has equipped 90% of power transmission utilities worldwide, and 40% of the world’s energy is managed by its software. GE Power has a strong installed base, innovative technologies and digital offerings that help make power more affordable, reliable, accessible and sustainable.
The transaction is expected to close by the fourth quarter 2018, subject to customary closing conditions and regulatory approvals.
The Distributed Power business had sales of US$1.317 billion for the year ended Dec. 31, 2017.
Advent beat out other suitors, including Kohler and Cummins, for the GE portfolio. Advent is based in Frankfurt, Germany and was founded in 1984.