GE to Buy LM Wind Power for EUR 1.5 Billion

October 11, 2016

General Electric (GE) has agreed to buy LM Wind Power Holding A/S, a Denmark-based designer and manufacturer of wind turbine blades, for an enterprise value of EUR 1.5 billion.

The deal in-sources wind turbine blade design and manufacturing for GE’s Renewable Energy business, improving its ability to increase energy output and create value for onshore and offshore customers, GE said.

Since 2001, LM Wind Power has been owned by Doughty Hanson, a London-based private equity firm.

As part of the agreement, Doughty Hanson will sell its stake in LM Wind Power to GE, with the transaction expected to close in the first half of 2017, subject to regulatory approvals.

The acquisition is valued at 8.3 times 2016 forecast EBITDA, GE said.

”Increasingly, wind turbine innovation is driven by system design, materials science, and analytics — all elements of the GE Store,” Jérôme Pécresse, President and CEO of GE Renewable Energy, said.

”We, along with LM Wind Power, have a deep pipeline of technical innovations that can further reduce the cost of electricity. With our combined global footprint, we can build flexible solutions for customers around the world. This combination will help sustain growth in the wind power industry. The acquisition of LM Wind Power, a leading supplier to the wind industry, will help us deliver on that goal. Simply stated, we’ll be more local, have more flexibility and knowledge in turbine design and supply, and more ability to innovate and reduce product costs, while improving turbine performance. We will also develop enhanced digital and services capabilities. All of which will be good for customers, competition in the industry, and the growth of wind power globally.”

LM Wind Power is a manufacturer of rotor blades for the wind industry with a global manufacturing footprint spanning 13 sites in eight countries across four continents.

For the first half of 2016, the company reported sales of EUR 491 million and EBITDA of EUR 87 million which represented year-on-year growth of 40% and 81% respectively.

In June of this year, LM Wind Power unveiled the world’s longest ever blade at 88.4 meters long, built for Adwen’s 8MW offshore wind turbine.

“The offer from GE makes clear commercial sense for the growth of LM Wind Power and we are absolutely delighted with the prospects of having a world leader as our owner,” LM Wind Power CEO Marc de Jong said.

”It provides us with the necessary stability, visibility and strength to continue to realize the ambitious growth plans of the business and fully utilize our advanced design and technology, improve our manufacturing capabilities and reliability, expand our global footprint and reduce the Levelized Cost of Energy. It’s a great day for LM Wind Power and for the wind industry!”

LM Wind Power has produced more than 185,000 blades since 1978, corresponding to approximately 77 GW installed wind power capacity.