GE to buy Converteam
The transaction, endorsed by Converteam's management team and employee representative groups, is expected to close during third quarter 2011, subject to customary closing conditions
Atlanta, March 29, 2011 — GE announced today that its Energy business has entered into an agreement to acquire about 90 percent of Converteam, a provider of electrification and automation equipment and systems, from a controlling shareholder group that includes management, Barclays Private Equity and LBO France, for about $3.2 billion.
The transaction, endorsed by Converteam's management team and employee representative groups, is expected to close during third quarter 2011, subject to customary closing conditions.
Converteam's senior management will retain nearly a 10 percent stake in the company. GE and Converteam senior management have entered into agreements pursuant to which GE would purchase the remaining shares in the company over the next two to five years.
The price for the shares can vary based on the time of sale, business performance and other factors. GE expects that the price should be no greater than about $480 million.
Converteam's solutions enable customers in a variety of industries to replace or improve mechanical processes with high-efficiency electric alternatives that deliver better reliability, less maintenance and lower emissions.
Converteam's portfolio includes drives and other power electronics, advanced rotating machines, generators and controls that when integrated address three critical customer needs across a range of industries:
Converting electricity into mechanical performance to power and control motion or industrial assets such as natural gas pipelines and gas gathering compressors;
Adjusting electrical frequency to precise user requirements, as in solar power inverters.
The multi-sector energy efficiency, electrification and automation industry, in which Converteam participates, was valued at over $30 billion in 2010 and is growing at rates above global GDP growth.
About 25 percent of the world's electricity is used to power rotating machines in a wide range of industries and applications. Converteam's high-efficiency solutions are designed to reduce the electricity consumption of rotating machines by nearly one-third, offering significant savings in terms of cost, energy intensity and greenhouse gas emissions.
GE's global reach and local expertise will improve Converteam's ability to serve customers in high growth regions such as Brazil, Russia, China, India and the Middle East.
Building on more than 100 years of expertise in power electronics and automation technologies, Converteam operates across six key vertical sectors: offshore and onshore oil and gas, power generation, wind and solar renewables, industrial, marine and services.
Headquartered in Massy, France, Converteam has 5,300 employees, including more than 1,600 engineers, and operates in more than 80 countries. Converteam recently announced 2010 sales of about $1.5 billion and EBITDA of about $239 million, with about 36 percent growth in orders versus 2009.