Woodward to acquire L’Orange

Apr 13 2018

Rolls-Royce ((RR) and Woodward have signed an agreement for the latter to acquire L’Orange and its related operations located in Germany, the US and China, for €700 mill.

L’Orange is part of RR’s Power Systems business and is one of the world's leading suppliers of fuel injection systems for industrial diesel, heavy fuel oil and dual-fuel engines.

The company’s 2017 pro forma sales were €244 mill, with pro forma underlying EBITDA of €74 mill and pro forma underlying operating profit of €64 mill. Pro forma post-tax free cash flow for the period was €51 mill.

L’Orange supplies fuel injection technology for engines, including marine power and propulsion systems. The company serves some of the most well known specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ 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. L’Orange, which will be renamed Woodward L’Orange, will be integrated into Woodward’s Industrial segment. 

Warren East, RR CEO, 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 RR 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 Gendron, Woodward Chairman and CEO, 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.”

The transaction is expected to close by the end of the second quarter of this year, subject to clearance from the German antitrust authorities.


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