Woodward To Acquire L’Orange

09 April 2018

Rolls-Royce and Woodward, Inc. jointly announced that Woodward will acquire fuel injection specialist L’Orange GmbH, part of Rolls-Royce Power Systems. The agreement includes L’Orange‘s operations in Germany, the United States and China, for an enterprise value of €700 million (US$859).

L’Orange supplies fuel injection technology for engines in applications such as marine power and propulsion systems, oil and gas processing, power generation and special-application vehicles. Its customer base includes diesel engine manufacturers worldwide, including Rolls-Royce Power Systems’ subsidiaries, MTU Friedrichshafen and Bergen Engines, as well as other low- and high-speed engine manufacturers.

After the acquisition, L’Orange will be renamed Woodward L’Orange and be integrated into Woodward’s Industrial segment. Woodward said it expects the acquisition to establish it as a premier technology and system provider of engine control systems to the industrial engine market and the complementary portfolio from L’Orange will open up to further expansion into key industrial segments and geographies, while boosting profitability.

Rolls-Royce said 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.

“This transaction builds on the actions we have taken over the last two years to simplify our business,” Warren East, CEO of Rolls-Royce, said. “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.”

In January, Rolls-Royce had announced that it was reviewing its strategic options for L’Orange. The company’s intellectual property portfolio includes over 55 active patents, with 75 patents pending. In 2017 L’Orange’s pro forma sales were €244 million, with underlying EBITDA of €74 million and operating profit of €64 million.

“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,” said Thomas A. Gendron, chairman and chief executive officer of Woodward. “The acquisition of L’Orange brings innovative technology, bolsters relationships with key customers and enhances the profitability of our Industrial segment.”

The transaction has been approved by the boards of directors of both Rolls-Royce and Woodward, as well as the Supervisory Board of Rolls-Royce Power Systems. The transaction is expected to close by the end of the second quarter of 2018, subject to clearance from the German antitrust authorities.

STAY CONNECTED



Receive the information you need when you need it through our world-leading magazines, newsletters and daily briefings.

Sign up

POWER SOURCING GUIDE

The trusted reference and buyer’s guide for 83 years

The original “desktop search engine,” guiding nearly 10,000 users in more than 90 countries it is the primary reference for specifications and details on all the components that go into engine systems.

Visit Now

CONNECT WITH THE TEAM
Becky Schultz Vice President of Content Tel: +1 480 408 9774 E-mail: [email protected]
Julian Buckley Editor Tel: +44 (0) 1892 784088 E-mail: [email protected]
Chad Elmore Managing Editor Tel: +1 262 754 4114 E-mail: [email protected]
Josh Kunz Power Progress Brand Manager Tel: +1 414 379 2672 E-mail: [email protected]
Roberta Prandi Power Progress International Brand Manager Tel: +39 334 6538183 E-mail: [email protected]
Simon Kelly Sales Manager Tel: +44 (0) 1892 786 223 E-mail: [email protected]
CONNECT WITH SOCIAL MEDIA