Deutz Power Systems Sold to Private Equity Firm
Posted on July 31, 2007Deutz AG has signed an agreement to sell Deutz Power Systems, its larger output gas and diesel engines business to 3i, a private equity and venture capital firm. The reported price is €360 million (US$493 million). The transaction is expected to close by the end of the third quarter. The sale is subject to approval by the Supervisory Board of Deutz AG and the antitrust authorities. Following the sale of Deutz Power Systems, Deutz said it will focus on its “core competence,” the development and production of compact diesel engines.
Gordon Riske, CEO of Deutz AG commented: "Following a detailed strategic review, the management board and supervisory board have concluded that we cannot exploit the full potential of the compact engines business, as well as the medium and large sized stationary gas engines business in parallel. However, both businesses have great prospects for further profitable growth." The overlap between Deutz Power Systems and the Compact Engines business of Deutz AG is limited as business processes, customer demands and market characteristics differ, Deutz said.
3i said it plans to work together with the company's management to continue its present growth strategy based on its outstanding technological expertise and strong competitive position in the growing global market for decentralized power generation. "With its global network, 3i is the ideal partner to support the international expansion of this business," said Peter Wirtz, a director at 3i Deutschland. Edit Module