Rolls-Royce has signed an agreement to sell L’Orange, a wholly owned subsidiary of Rolls-Royce Power Systems, to Woodward for an enterprise value of €700 million (£610 million).
Woodward, which is headquartered in Fort Collins, Colorado, US is an independent designer, manufacturer and service provider of control system solutions and components. It supplies fuel injection technology for the marine power and propulsion systems and services to diesel engine manufacturers including Rolls-Royce Power Systems’ subsidiaries, MTU Friedrichshafen and Bergen Engines, and other low to high speed engine builders.
Woodward will be renamed Woodward L’Orange and will be integrated into Woodward’s Industrial segment. L’Orange will remain an important partner and supplier for Rolls-Royce Power Systems in the future through a long-term supply agreement, with an initial term of 15 years.
Rolls-Royce CEO Warren East 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 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 as they join the Woodward organisation.”
The transaction is expected to close by the end of the second quarter of 2018.
