GE Continues Expansion of $40 Billion Energy Technology Portfolio With Acquisition of Dresser, Inc.
06 October 2010GE today announced that it has signed a contract to acquire Dresser, Inc., a global energy infrastructure technology and service provider. The $3 billion deal is the latest in a series of acquisitions over the last 10 years that has helped grow GE’s energy business and deliver record profitability.
The addition of Dresser’s portfolio, which includes technologies for gas engines, control and relief valves, measurement, regulation and control solutions for gas and fuel distribution, will expand GE’s core energy offerings and extend its reach into adjacent offerings for its energy and industrial customers around the world. The deal is subject to customary closing conditions and is expected to close promptly after receiving regulatory approval.
“Dresser is a great fit for the GE business model,” said John Krenicki, vice chairman of GE and president and CEO of GE Energy. “Dresser’s technology complements our existing gas engine portfolio and adds offerings complementary to those of GE in the $45 billion flow technology industry, including product offerings in the highly engineered valve segment. Eighty-five percent of Dresser’s revenue is from energy customers, and it has developed a large installed base of equipment, which is a big reason why 40 percent of its total revenue is derived from aftermarket service offerings, and there is a lot of room for future expansion.”
Krenicki added, “Dresser has a global franchise and brand with 60 percent of revenues outside of North America, which will be accelerated by GE’s global footprint. Through the acquisition, we will bring to bear our focus on research and development to Dresser’s highly engineered custom solutions and create an opportunity for Dresser's 6,300 talented employees to dramatically expand their businesses.”
Headquartered in Addison, Texas, Dresser operates in more than 100 countries, delivering compression, flow technology, measurement and distribution infrastructure and services to customers in more than 150 countries. Dresser had revenues of $2 billion and earnings of $318 million in 2009.
“Our track record integrating previous acquisitions such as Nuovo Pignone, (Oil & Gas), Jenbacher (gas engines), Bently Nevada (conditioning and monitoring) and Enron Wind (renewable energy), gives us great confidence to build upon as we move forward with Dresser,” explained Krenicki. “Our team is committed to technology leadership, globalization and operating discipline.”
Dresser’s diverse portfolio will complement many of GE’s product offerings. Dresser’s gas engines will give GE best in class, low-emissions, fuel-flexible mechanical-drive technology that can be applied to the small-scale compression segment for customers in the Oil and Gas sector. GE Jenbacher’s expertise in clean, fuel-flexible, high-efficiency, power-generation engines, combined with Dresser’s expertise in durable, low-emissions, fuel-flexibility rich-burn mechanical drive engines, will help deliver a wide-range of enhanced gas-engine technology solutions to petrochemical, mining, manufacturing and power-generation customers worldwide.
Dresser also will further the development of GE Energy’s monitoring, diagnostics and performance optimization offerings. Dresser’s pressure relief and control valve technologies will be complemented by GE’s domain expertise, which will create opportunities to bring additional technology and applications to Dresser’s offerings. GE plans to build out solutions it offers to help customers effectively manage the pressure and relief flows in pipelines, processing plants and power generation facilities. Dresser’s capabilities combined with GE’s existing solutions will help to increase customer productivity and reduce operational costs.
Dresser President and CEO John Ryan said, “Joining the GE family will enhance our company’s capability to provide best-in-class energy technologies to a much broader segment of the energy sector. Our employees have worked hard to build a world-class reputation and we are confident that our tradition of putting the customer first will continue to be the standard. Today’s announcement marks the beginning of a great opportunity for our customers and employees as we put these two 100+-year-old companies together and create new paths for growth and innovation.”
The deal announcement continues a series of actions in GE’s energy business over the last 10 days. On September 27, GE announced a joint venture in China to grow in the world’s largest wind market. On October 1, the company announced the close of the purchase of assets of Calnetix Power Solutions, which expands GE’s capabilities to recover waste heat from industrial processes for electricity generation and will also complement GE’s gas engine business. On October 4, GE signed a $700 million contract with Saudi Electricity Company for a new, high-efficiency power plant in Riyadh, Saudi Arabia.