Power solutions provider Rolls-Royce has agreed to sell its fuel injection systems business L’Orange – including its related operations in Germany, the US and China – to US-based Woodward for €700 million.
Woodward is a designer, manufacturer and service provider of control system solutions and components for the aerospace and industrial markets.
L’Orange, part of Rolls-Royce’s subsidiary Rolls-Royce Power Systems, generated €244 million of sales in 2017 with underlying EBITDA (earnings before interest, taxes, depreciation and amortization) of €74 million and an underlying operating profit of €64 million.
The company’s intellectual property portfolio includes more than 55 active patents, with 75 patents pending, and it was said to have a large installed base of industrial equipment.
The fuel injection technology supplied by L’Orange is used in engines that power a wide range of industrial equipment, including special-application vehicles and power generators. The companies it serves include Rolls-Royce Power Systems, MTU Friedrichshafen and Bergen Engines.
L’Orange will be renamed Woodward L’Orange and it will be integrated into Woodward’s industrial segment.
It was said that L’Orange’s complementary portfolio would allow Woodward to further expand into key industrial segments and geographies, while boosting profitability.
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.”
The transaction is expected to close by the end of the second quarter of 2018, subject to clearance from the German antitrust authorities.