By Editors of Power Engineering
The deal would give GE’s Renewable Energy segment an internal source for wind turbine blade design and manufacturing and improve its ability to increase energy output, the company reported.
LM Wind Power is currently owned by London private equity firm Doughty Hanson.
The acquisition is valued at 8.3 times LM Wind’s EBITDA. The transaction should close in the first half of 2017 and begin adding to GE’s earnings in 2018.
”Increasingly, wind turbine innovation is driven by system design, materials science, and analytics -- all elements of the GE Store,” said Jérôme Pécresse, President and CEO of GE Renewable Energy. “We, along with LM Wind Power, have a deep pipeline of technical innovations that can further reduce the cost of electricity. With our combined global footprint, we can build flexible solutions for customers around the world. This combination will help sustain growth in the wind power industry.”
LM Wind Power owns 13 factories in eight countries, as well as 190 patents. Currently, LM Wind Power is GE’s largest blade supplier, as GE doesn’t produce blades in-house. Since 1978, LM Wind Power has produced more than 185,000 blades and contributed to 77 GW of wind power capacity.
“This deal will merge the speed and focus of LM Wind Power’s entrepreneurial culture with GE’s world-class engineering and operational capabilities,” said Marc de Jong, EO of LM Wind Power. “Our two organizations are highly complementary and the transaction positions us well to respond faster to customer needs and enhance performance of wind turbines to ultimately reduce the cost of energy.”
GE has continued to grow its wind power business, particularly with the $10 billion acquisition of Alston SA’s power operations. The company is also providing equipment for the Block Island project in Rhode Island, which will be the first U.S.-based offshore wind farm.