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 approximately a 10% 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 approximately $480M.
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 5300 employees, including more than 1600 engineers, and operates in more than 80 countries. Converteam recently announced 2010 sales of approximately $1.5B and EBITDA of approximately $239M, with approximately 36% growth in orders versus 2009.
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. Approximately 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.
“High-efficiency, fully electric solutions represent a megatrend across the global energy landscape. Our customers in key industries increasingly demand more reliable, efficient and flexible solutions in order to improve their competitiveness,” said John Krenicki, GE vice chairman and president and CEO of GE Energy. “Converteam’s world-class people and energy efficient products and services connect a lot of pieces in our portfolio which will enable us to offer integrated solutions to our customers.”
“GE and Converteam complement each other superbly,” added Pierre Bastid, president and CEO, Converteam. “As a long-standing partner, GE fully understands our business model and will add significant value by allowing our technologists to work within GE’s tremendous network of researchers and engineers. In addition, we will expand our global footprint, extend our customer reach and be able to tap into a world-class supply chain. Within the GE family, Converteam now has the opportunity for further development and growth, benefitting our customers and employees alike.”
