General Electric Co. (www.ge.com), Fairfield, Conn., announced on Oct. 6 that it has signed a contract to acquire Dresser Inc. (www.dresser.com), Addison, Texas, 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 company said.
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, GE said.
“Dresser is a great fit for the GE business model,” said John Krenicki, vice chairman of GE and president and chief executive officer 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.”
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.
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 Sept. 27, GE announced a joint venture in China to grow in the world’s largest wind market. On Oct. 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 Oct. 4, GE signed a $700 million contract with Saudi Electricity Company for a new, high-efficiency power plant in Riyadh, Saudi Arabia.
General Electric Co.