APRIL 9, 2018 — Rolls-Royce (London:RR.) and Woodward, Inc. (NASDAQ:WWD) have signed an agreement for Woodward to acquire L’Orange GmbH and its related operations located in Germany, the United States and China for an enterprise value of €700 million (US$859 million).
L’Orange is based in Stuttgart, Germany and has approximately 1,000 employees based mostly in Germany, but also in the US and China.
The transaction is expected to close by the end of the second quarter of 2018, subject to clearance from the German antitrust authorities.
L’Orange is one of the world’s leading suppliers of fuel injection systems for industrial diesel, heavy fuel oil and dual-fuel engines.
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.
L’Orange serves some of the world’s best known specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ subsidiaries, MTU Friedrichshafen and Bergen Engines. 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.
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 organization.”
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.”