Deals

APR Energy plc Acquires General Electric Company

Posted: 24th October 2013 08:49
APR Energy plc (LSE: APR) today announces that it has entered into an agreement ("Acquisition Agreement") with General Electric Company (NYSE: GE) ("GE") for the acquisition ("Acquisition") by the Company of the power rental business (the "GE Business") of GE. To coincide with this announcement, the Company has also brought forward its Q3 IMS covering the period from 1 July 2013 through to 23 October 2013 and released a further RNS covering this trading update.

GE Power & Water, part of GE, is a global leader in manufacturing and servicing mobile gas turbine equipment. The GE Business has its principal operations based in Houston and is a provider of temporary power generation rental through the use of mobile gas turbines of less than 50MW. The GE Business to be transferred pursuant to the Acquisition Agreement has 520MW of power generation capacity in its portfolio, which includes five associated rental contracts with 20 temporary power generation assets based in Bangladesh, Iraq, the U.S. Virgin Islands, Canada, Australia and Dubai. The Acquisition advances APR Energy towards its stated strategic goals, creating the world's leading fast-track mobile turbine fleet of 1.2GW, significantly strengthening and diversifying APR Energy's business, and creating a long-term strategic alliance with GE.

Under the terms of the Acquisition Agreement, GE will receive a total consideration of US$314 million, of which US$250 million will be satisfied by way of the issue to GE of approximately 15.5 million of APR Energy plc ordinary shares ("Ordinary Shares") of £0.10 ("Acquisition Shares") and with the remaining US$64 million being in cash. Application will be made to the Financial Conduct Authority and the London Stock Exchange for the Acquisition Shares to be admitted to the Official List and to trading on the London Stock Exchange. It is expected that dealings will commence on 28 October 2013.

The board of the Company believes that the Acquisition is in the best interests of the Group and its shareholders, as well as its broader stakeholders, because it:
  • Creates a long-term strategic alliance with GE, providing dedicated supply for the fast-track, turnkey power segment, a collaborative business development platform, and expanded access to worldwide support services, subject to existing contractual arrangements
  • Makes GE a key strategic investor in APR Energy
  • Significantly strengthens and diversifies APR Energy's global footprint and contract revenue base, providing access to new developed and developing countries
  • Enhances APR Energy's large scale, fast-track power business, positioning APR Energy well to take advantage of expanding opportunities with the fastest growing technology in the industry
  • Greatly improves APR Energy's footprint in natural gas, a growing fuel source that is both cost-efficient and emissions friendly
  • Has a strong financial rationale and is expected to be earnings accretive for the Company
  • Delivers enhanced cash generation for the enlarged group (the "Enlarged Group")
Commenting on the announcement, APR Energy's Chief Executive Officer, John Campion said:
 
"This is a transformational transaction for APR Energy, allowing us to move forward rapidly towards delivering our stated medium-term business objectives. By creating the world's leading fast-track mobile turbine power business and a long-term relationship with GE, we are well placed to deliver against an underserved and rapidly growing opportunity with the preeminent technology. The transaction diversifies our revenue base, gives us exposure to new geographies and sectors, and enhances our natural gas footprint. We are excited to be working closely with GE, whose partnership and equity commitment is an endorsement of our prospects and our ambition to be the leader in the large-scale, fast-track power industry."
 
Commenting on the announcement, CEO of GE's  Power & Water Distributed Power business, Lorraine Bolsinger said
 
"Our investment in APR Energy reinforces our strong belief in the distributed power segment, as well as APR's strong capabilities and prospects for success. We continue to see growing demand from customers urgently needing our leading technology for bridging solutions while more permanent solutions can be put in place. With this alliance, customers can get fast power with our technology from a premiere fast-track power provider, APR Energy, or they can buy the equipment from us.  For both kinds of customers, we are determined to offer the most efficient products and have them available for rapid deployment."

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