Rolls-Royce and Woodward, Inc have signed an agreement for Woodward to acquire L’Orange GmbH and its related operations located in Germany, the US and China (L’Orange), for an enterprise value of EUR700 million ($859 million). L’Orange is part of Rolls-Royce, the power solutions provider, and specifically its Rolls-Royce Power Systems business.
L’Orange supplies fuel injection technology for engines that power a wide range of industrial applications including marine power and propulsion systems, special-application vehicles, oil and gas processing, and power generation. L’Orange serves some of the world’s best known specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ leading subsidiaries, MTU Friedrichshafen and Bergen Engines, and other low to high speed engine builders.
Woodward is an independent designer, manufacturer, and service provider of control system solutions and components for the aerospace and industrial markets. L’Orange, which will be renamed Woodward L’Orange, will be integrated into Woodward’s Industrial segment. The acquisition establishes Woodward as a premier technology and system provider of engine control systems to the industrial engine market. Additionally, the highly complementary portfolio allows for further expansion into key industrial segments and geographies, while boosting profitability. L’Orange will remain an important partner and supplier for MTU and Bergen in the future through long-term supply agreements, with an initial term of 15 years, allowing Rolls-Royce Power Systems’ customers to continue to benefit from L’Orange’s high level of expertise, best-in-class service, and innovative R&D.
Warren East, CEO of Rolls-Royce, said, “This transaction builds on the actions we have taken over the last two years to simplify our business. The divestiture of L’Orange enables Rolls-Royce Power Systems to focus on other long term, high growth opportunities and our company to allocate our capital to core technologies and businesses that drive greater returns for the group.”
Andreas Schell, President and CEO of Rolls-Royce Power Systems, added, “Rolls-Royce Power Systems will remain a key customer of Woodward L’Orange. We have enjoyed working with L’Orange who have a leading position in their markets, excellent technology, a skilled workforce and strong leadership. We wish them well for the future as they join the Woodward organisation.”
Thomas A. Gendron, Chairman and Chief Executive Officer of Woodward, said, “L’Orange is an excellent strategic and financial fit for Woodward, and this transaction exemplifies our acquisition strategy to invest in markets with solid long-term fundamentals. The acquisition of L’Orange brings innovative technology, bolsters relationships with key customers and enhances the profitability of our Industrial segment.”