Triton, an European investment firm, will purchase the auxiliary components business of Alstom's Thermal Power division for an enterprise value of around €730m.
Located in Mannheim, Germany, the division produces new heating equipment for power plants and factories, and also services the equipment.
The components business has three product lines: air preheaters and gas-gas heaters for thermal power plants, heat transfer solutions for a variety of petrochemical and industrial processes, and grinding mills for diversified industrial applications.
The deal was approved by Alstom's board of directors on 31 March 2014 and the transaction is expected to close before the end of first half of 2014-2015 fiscal year.
The project is part of the non-core asset disposal programme announced by Alstom in November 2013.
Alstom's division employs more than 1,500 people worldwide and is expected to generate revenues of more than €430m for the year ended March 2014.
Alstom CFO Nicolas Tissot said that this transaction highlights the strength and value of Alstom portfolio of activities, and illustrates the group's ability to deliver on its strategy of selective, value-enhancing disposals.
Triton funds director general partner Peder Prahl said, "Triton looks forward to working with the management team and employees to strengthen and grow the company."
Alstom Thermal Power president Philippe Cochet said, "This sale will ensure a solid future for employees and a sustainable quality of service for customers. Alstom, which already contributed up to 20% of the sales, will remain a major customer."