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GE to sell Distributed Power business to Advent International for $3.25 billion

General Electric 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 US.

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 US 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 $1,317 million for the year ended December 31, 2017.

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.

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.

Carlos Lange, president of Distributed Power, says: “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.”

Ranjan Sen, managing partner at Advent International, says: “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. 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.”

Russell Stokes, president and chief executive officer of GE Power, says: “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.”

GE Power, which says it 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 per cent of power transmission utilities worldwide, and 40 per cent 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.