GE Sells Distributed Power Business To Private Equity

25 June 2018

GE announced that it will sell its Distributed Power business to private equity firm Advent International for US$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.

Distributed Power, a business unit of GE Power, is a 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 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 3000 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. The Distributed Power business had sales of US$1.317 billion for the year ended Dec. 31, 2017.

GE said that, with over 100 transactions successfully completed in the Industrials, Energy and Business Services sectors, Advent is one of the most experienced global investors in these sectors. GE said the firm invests in well-positioned companies with significant operational and strategic potential and partners with management teams to create value by driving revenue and earnings growth. Advent has a strong global network as well as extensive experience in carve-outs of large industrial companies to significantly support the Distributed Power business in expanding its market position and establishing a strong standalone entity.

Advent beat out other suitors, including Kohler and Cummins, for the GE portfolio. Advent is based in Frankfurt, Germany and was founded in 1984. According to its website, over the last 10 years, investments have included Concardis Payment Group, a provider of digital payment solutions; MEDIAN Kliniken, a post-acute clinic operator in Germany; Casa Reha, a German nursing home group; Addiko Bank (formerly Hypo Group Alpe Adria), which operates a banking network in southeast Europe; allnex, a global producer of industrial coating resins; Douglas Holding, a European beauty retailer; GFKL, a provider of receivables management services in Germany; and Oxea, a producer of oxo-alcohols and derivatives. The company’s most recent acquisition was Deutsche Fachpflege Gruppe, a provider of outpatient intensive care in Germany.

In North America, investments include Culligan International Group, a global leader in water softening and cleaning products and services; Fort Dearborn, a supplier of prime labels; and Quala, the largest independent provider of cleaning and environmental services to the chemical and food industries in North America. It has also invested in NCS Multistage, a manufacturer of well products used in horizontal oil and gas well completion in the energy sector. In Latin America, Advent has invested in companies including VIAKEM, a manufacturer of fine chemicals; GMT, a transnational distributor of chemical raw materials; and Oleoducto Central (Ocensa), the largest oil transportation system in Colombia.

“In Advent, we have a partner that shares our team’s passion for delivering outstanding customer outcomes,” said Carlos Lange, president of Distributed Power. “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.”

The transaction is expected to close by the fourth quarter 2018, subject to customary closing conditions and regulatory approvals.

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