Wired News – Woodward Acquires Fuel Injection Systems Technology Company L'Orange from Rolls-Royce
LONDON, UK / ACCESSWIRE / April 11, 2018 / Active-Investors.com has just released a free research report on Woodward, Inc. (NASDAQ: WWD). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=WWD as the Company's latest news hit the wire. On April 09, 2018, the Company disclosed that it has signed an agreement to acquire L'Orange GmbH and its related operations. L'Orange is part of Rolls-Royce Holdings PLC via its wholly-owned subsidiary of Rolls-Royce Power Systems. The transaction is valued €700 million (approximately $859 million). Register today and get access to over 1000 Free Research Reports by joining our site below:
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Details of the Deal
Woodward will acquire the entire business of L'Orange, including its operations in Germany, the US, and China as part of the deal. L'Orange supplies fuel injection technology for engines that are used in various industrial applications, including marine power and propulsion systems, special-application vehicles, oil and gas processing, and power generation. Some of its well-known clients included Rolls-Royce Power Systems' subsidiaries, MTU Friedrichshafen and Bergen Engines, as well as other specialist diesel engine manufacturers and low-to-high speed engine builders. For FY17, L'Orange's reported pro-forma sales were €244 million; its pro-forma underlying earnings before interest, tax, depreciation, and amortization (EBITDA) were €74 million; while its pro-forma underlying operating profit was €64 million. The Company also had post-tax-free cash flow of €51 million in the same period.
L'Orange is headquartered in Stuttgart, Germany, and has over 1,000 employees; most of whom are based in Germany, and the rest in the US and China.
The Boards of Directors of Rolls-Royce and Woodward have approved the deal along with the Supervisory Board of Rolls-Royce Power Systems. The deal is expected to close in Q2 2018, subject to regulatory approvals, including German antitrust regulators and other closing conditions.
Woodward plans to rename L'Orange as Woodward L'Orange and integrate its business into Woodward's Industrial Business segment.
Rolls-Royce had revealed its plans to explore strategic options for L'Orange in January 2018 and the divestment will allow it to focus on business opportunities with higher profit margins. The Company plans to utilize the proceeds from the divestment to pay off debt, improve its balance sheet, and for strategic acquisitions.
Benefits of the Deal
The deal allows Woodward to establish itself as a premier technology and system provider of engine control systems to the industrial engine market. L'Orange's product portfolio is highly complementary to Woodward's current product portfolio, and will enable Woodward to expand its presence in industrial segments and geographies. As part of the deal, Woodward will also acquire L'Orange's significant intellectual property portfolio which includes over 55 active patents, with 75 patents pending.
L'Orange brings with it a large installed base of industrial equipment which delivers a consistent and profitable aftermarket. As per the terms of the deal, L'Orange brings with it 15-year long-term supply agreements, wherein it will continue to be a partner and supplier for MTU and Bergen in the future. This ensures a long-term dedicated revenue stream for Woodward. At the same time, customers of Rolls-Royce Power Systems' will continue to benefit from L'Orange's high level of expertise, best-in-class service, and innovative research and development (R&D).
About Woodward Inc.
Fort Collins, Colorado-based Woodward is an independent designer, manufacturer, and service provider of control system solutions and components for the aerospace and industrial markets. The Company's aerospace systems and components optimize the performance of fixed wing and rotorcraft platforms in commercial, business, and military aircraft, ground vehicles, and other equipment. Its industrial related systems and components enhance the performance of industrial gas and steam turbines, reciprocating engines, compressors, wind turbines, electrical grids, and other energy-related industrial equipment.
The Company's products and systems include fluid, combustion, electrical, and motion control systems. The customers of the Company include leading original equipment manufacturers and end users of their products. The Company's sales were approximately $2.1 billion for FY17. The Company has an employee strength of over 7,400 people globally.
About Rolls-Royce Holdings PLC
London, UK-based Rolls-Royce is one of the world's leading industrial technology Companies, and is a pioneer in cutting-edge technologies that deliver the cleanest, safest, and most competitive solutions to meet our planet's vital power needs. The Company has presence in over 150 countries and its customers include over 400 airlines and leasing customers, 160 armed forces, 4,000 marine customers, including 70 navies, and more than 5,000 power and nuclear customers. The Company's annual underlying revenues were £15 billion for FY17 and an order book valued at approximately £78.5 billion as on December 31, 2017.
About Rolls-Royce Power Systems AG
Friedrichshafen, Germany-based Rolls-Royce Power Systems is a division of Rolls-Royce which specializes in large diesel engines and propulsion systems and distributed power generation plants. Its subsidiaries and products include:
MTU brand - Develops and manufactures large high-speed engines and propulsion systems for ships and heavy land, rail, and defense vehicles, as well as drive systems for use in the oil and gas industry and in power generation.
MTU Onsite Energy brand - Builds diesel gensets for emergency, base-load and peak-load power requirements, as well as co-generation plants for combined heat and power based on gas engines.
Bergen, Norway, which operates under the Rolls-Royce brand - Develops and manufactures medium-speed engines for marine and power generation applications.
L'Orange - Offers fuel injection systems for large engines.
Stock Performance Snapshot
April 10, 2018 - At Tuesday's closing bell, Woodward's stock rose 2.63%, ending the trading session at $75.38.
Volume traded for the day: 563.96 thousand shares.
Stock performance in the last month – up 0.63%; and past twelve-month period – up 9.42%
After yesterday's close, Woodward's market cap was at $4.72 billion.
Price to Earnings (P/E) ratio was at 25.60.
The stock has a dividend yield of 0.76%.
The stock is part of the Industrial Goods sector, categorized under the Aerospace/Defense Products & Services industry. This sector was up 1.8% at the end of the session.
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