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Woodward buys L’Orange from Rolls-Royce

9 April 2018

Rolls-Royce and Woodward announced that they have signed an agreement for Woodward to acquire L’Orange GmbH and its related operations in Germany, the United States and China, for an enterprise value of €700 million (US$859 million). L’Orange is part of Rolls-Royce Power Systems business.

L’Orange supplies fuel injection technology for industrial engines used in marine power and propulsion systems, special-application vehicles, oil and gas processing, and power generation. L’Orange serves some of the world’s best known specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ subsidiaries, MTU Friedrichshafen and Bergen Engines, and other low to high speed engine builders.

Woodward is an independent designer, manufacturer, and service provider of control systems and components for the aerospace and industrial markets. L’Orange will will be renamed Woodward L’Orange and integrated into Woodward’s Industrial segment. L’Orange will remain a supplier for MTU and Bergen in the future through long-term supply agreements, with an initial term of 15 years.

Rolls-Royce confirmed in January 2018 that it was reviewing its strategic options for L’Orange. The sale to Woodward will enable the L’Orange business to pursue new market opportunities that will be opened up as a result of no longer being associated directly with one individual engine manufacturer.

The transaction is expected to close by the end of the second quarter of calendar 2018, subject to clearance from the German antitrust authorities.

L’Orange is based in Stuttgart, Germany and has approximately 1,000 employees based mostly in Germany, but also in the USA and China. L’Orange’s 2017 pro forma sales were €244 million, with pro forma underlying EBITDA of €74 million and pro forma underlying operating profit of €64 million. Pro forma post-tax free cash flow for the period was €51 million.

Headquartered in Fort Collins, Colorado, USA, Woodward reported 2017 sales of approximately US$2.1 billion and has approximately 7,400 employees worldwide.

Source: Woodward