General Electric (NYSE: GE) announced in a press release today that it has signed an agreement to sell its industrial gas-engine business, Distributed Power, to Advent International, a global private equity firm, for $3.25 billion. The transaction includes Distributed Power’s Jenbacher and Waukesha engines, and also manufacturing sites located in Austria, Canada, and the U.S. Jenbacher was acquired by GE in 2003 and Waukesha, founded in 1906 as an engine maker for trucks, was acquired by GE in 2010.
GE had announced plans earlier in the year to sell off $20 billion in assets as part of a three-year restructuring plan, with hopes to achieve $10 billion in proceeds from selling assets this year.
Advent won the bid to acquire the Distributed Power business against engine maker Cummins in the final stages of the Jenbacher auction. Kohler and Wartsila and investor KKR left the bid earlier, according to a source close to the matter.
“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,” said Ranjan Sen, Managing Partner at Advent International. “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.”
GE is attempting to heavily cut costs due to calls for the conglomerate to be split apart and weak profits. The company is currently selling businesses and attempting to bolster its balance sheet with a new board and managers. The company expects the sale of its industrial gas engine to streamline GE’s power division, which saw a sharp decrease in profits.
In a statement, GE said the transaction is expected to close by the fourth quarter 2018.