GE Energy, a leading global supplier of power generation and energy delivery technologies, has purchased 90% of power conversion specialist Converteam Group SAS for $3.2 billion, with the option to buy the remaining 10% in two to five years for $480 million depending on performance. The transaction should be finalized during the third quarter of 2011.
GE Energy purchased the 90% position from Converteam management, Barclays Private Equity and LBO France. These listed investors are owners due to two previous leverage buyout operations: In 2005, Barclays Private Equity teamed with Converteam management to buy the company, while a similar deal was made in 2008 with LBO France.
The acquisition will support GE Energy’s efforts to develop its energy efficient equipment manufacturing activities – a global industry worth $30 billion and growing according to GE – as well as help its expansion strategy in emerging markets such as Russia, China, Brazil and the Middle East.
Orders Up in 2010 ?
A former unit of major industrial group Alstom, Converteam reported revenue of $1.5 billion in 2010 with income from operations totaling $222 million, representing 14.4% of sales in 2010. Orders received were up by 36% from 2009.
Converteam optimizes performance and energy savings across major markets, including solar, wind, marine, industrial, power generation, and oil and gas. With headquarters in Pittsburg, USA, Converteam has 5,300 employees worldwide with operations in 17 countries and sales in over 75 countries.
GE Energy revenue in 2010 was listed at $38 billion. Operating in 140 countries with over 90,000 employees worldwide, it is a segment of General Electric that develops and deploys technology for efficient use of natural resources. The company opened a Smart Grid Experience Center in Atlanta, Georgia, at the start of 2011.
Key Statistics – Global Energy (source: Datamonitor)
- Global energy industry generated total revenue of $6,050 billion in 2009
- Growth bounced back in 2010 and should continue until 2014, with a compound annual growth rate (CAGR) of over 13% (2009-2014), raising industry value to $11,250 billion by 2014
Key Players – Energy Industry (source: Platt's)
- Top 5 world energy companies: ExxonMobil (USA), BP (UK), Gazprom Oao (Russia), Petrobras (Brazil) and Total (France)
- Top 5 fastest-growing energy companies: Ultrapar Participacoes SA (Brazil), RusHydro JSC (Russia), China Resources Power Holdings (Hong Kong), Abu Dhabi National Energy Co (United Arab Emirates) and NuStar Energy LP (Texas)