GE has agreed to sell its Distributed Power business, a provider of reciprocating gas engines, power equipment and services, to US private equity firm Advent International for $3.25bn.
Through the deal, Advent will own GE’s Jenbacher and Waukesha gas engines and also Distributed Power’s manufacturing plants located across Austria, Canada and the US.
Distributed Power’s product portfolio comprises industrial gas engines ranging from power generation capacities of 200kW to 10MW.
The Jenbacher gas engines boast of fuel flexibility, which makes them to be operated either on natural gas or various other gases. GE Waukesha engines are said to be capable of operating under high stress conditions, and can run on a range of fuels such as high-BTU hot fuels, shale gases, and variable quality field gas.
GE Distributed Power president Carlos Lange said, “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 expects to significantly back the Distributed Power business in growing its market position apart from helping it to establish a strong independent entity.
The private equity giant plans to substantially invest in critical areas of the acquired business such as its product portfolio, service network and digitization.
Advent International managing partner Ranjan Sen said: “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.
“The business has significant growth potential on a global scale and talented employees all over the world.”
The Distributed Power business, which had delivered over 48,000 Jenbacher and Waukesha reciprocating gas engines across the globe, had registered sales of $1.31bn for the year ended 31 December, 2017.
For GE, the transaction will help it in accelerating reinvestment in its business while also giving scope to the Distributed Power business to pursue its growth strategy, said GE Power president and CEO Russell Stokes.
The sale of the Distributed Power business is likely to be completed by the fourth quarter 2018, provided it satisfies customary closing conditions and gets regulatory approvals.