GE buys Lineage Power from The Gores Group
The deal is expected to close in the first quarter of 2011, subject to customary closing conditions, including receipt of regulatory approval
Atlanta, January 13, 2011 — GE signed an agreement to acquire privately-held Lineage Power Holdings, Inc., from The Gores Group.
Lineage Power is a leading global provider of high-efficiency power conversion infrastructure technology and services for the telecommunications and datacenter industries.
The deal will open the door for GE Energy technology to be deployed in the $20 billion per year power conversion space, where the demand for reliable, high-quality power is driven by the growth in cloud computing and mobile internet voice, video and data applications.
Lineage Power had revenues of about $450 million in 2010. The transaction is valued at about $520 million or eight times enterprise value on 2011 EBITDA basis. The deal is expected to close in the first quarter of 2011, subject to customary closing conditions, including receipt of regulatory approval.
Lineage Power is headquartered in Plano, Texas, and has nearly 2,300 employees, with manufacturing operations in China, Mexico and India.
The deal is the latest in a series of announcements that will expand GE’s $40 billion energy portfolio of solutions for customers in vital industries.
In October 2010, GE announced the signing of a contract to acquire Dresser Inc., a Dallas-based energy infrastructure company. Last month, the company announced its intention to make an offer for 100 percent of Wellstream Holdings PLC, a British oil pipe manufacturer.
“According to recent studies, there will be 1.1 billion smartphones sold globally by 2013,” said Dan Heintzelman, GE Energy Services president & CEO. “Every new mobile device plugs into an infrastructure that requires an ever increasing amount of high-quality power. The growth in high-bandwidth mobile internet applications and cloud computing is accelerating that demand. A globally networked planet needs a lot of power to keep spinning. Customers want efficient, reliable means to manage that power.”
Deutsche Bank is the exclusive financial advisor to GE on the transaction. Morgan Stanley & Co. Incorporated acted as exclusive financial advisor to Lineage Power and The Gores Group on the transaction.