Siemens has agreed to sell Flender, a Germany-based supplier of mechanical and electrical drive systems, to investment firm The Carlyle Group for €2.02bn.

Flender is engaged in providing gearboxes, couplings, generators, and associated services for a wide range of industries. The company caters to wind power, oil and gas, power generation, cement, marine, water and wastewater, and other industries.

It has a workforce of nearly 8,600 people across the world and has generated pro-forma revenue of nearly €2.2bn in fiscal 2020.

Why Siemens is offloading Flender from its portfolio of companies

The sale of Flender is said to be a major step for Siemens in executing its Vision 2020+ strategy of transforming into a focused technology company. Last month, Siemens completed spin-off of Siemens Energy.

In early September 2020, the German engineering company combined Siemens Wind Energy Generation (WG) into Flender to strengthen its business with wind turbine components.

Siemens said that Flender’s sale to Carlyle Group means that it forgoes the originally planned spin-off and public listing of the mechanical and electrical drive systems business.

Siemens chief financial officer Ralf Thomas said: “Our original plan was to list Flender on the stock exchange through a spin‑off. Yet we’ve always been open for alternative solutions, too.

“The interest that numerous investors have taken clearly shows how attractive the company is and confirms the approach that we’ve been pursuing at our Portfolio Companies.

“The new ownership means that Flender will have the opportunities it will need in the future to optimize itself to an even greater extent and to address its customers’ requirements in an even more targeted way.”

Carlyle Group said that it will make use of its considerable experience in the industrials sector to support the acquired business to fully realise its potential as an independent company.

The investment group also expects to drive accelerated growth for the company by means of operational and strategic improvements, which would include investment into Flender’s technology and service platform.

Carlyle Europe buyout managing director and co-head Gregor Böhm said: “As a global leader in gear and drive technology with a unique product and service portfolio, Flender is ideally positioned for further growth.

“Our significant Industrials expertise, as well as extensive experience with carve-out transactions, positions Carlyle well to support Flender with its continued growth and innovation.”

The transaction, which is subject to foreign-investment and antitrust approvals, is anticipated to be completed in the first half of next year.