APR Energy has signed an agreement with General Electric Company (GE) to acquire GE's power rental business, which has a portfolio of 520MW power generation capacity, for a consideration of $314m.
GE will receive around 15.5 million of APR Energy ordinary shares of £0.10 ($0.16) totaling $250m and $64m in cash, and the transaction will not require shareholder approval as a consequence of APR Energy's standard listing.
Based in Houston, GE Business, the power rental business of GE Power & Water that is part of GE, provides temporary power generation rental through the use of mobile gas turbines rated below 50MW.
The GE Business portfolio being acquired includes five associated rental contracts with 20 temporary power generation assets based in Bangladesh, Iraq, the US Virgin Islands, Canada, Australia and Dubai.
In addition, the companies have also signed a relationship agreement on completion as part of the acquisition agreement to ensure that APR Energy can operate business independently and enable closer relationship between the company and GE.
According to the acquisition agreement, GE will also sign a supply and services agreement with APR Energy to provide turbines and associated packages as well as associated services including on-going technical support and training, and supply related parts and services.
The companies have also agreed to sign a cross-marketing agreement and licensing arrangements that would allow APR Energy to use GE trademarks in connection with equipment supplied under the supply and services agreement.
The acquisition will expand APR Energy's capacity in mobile turbines to 1.2GW, strengthen the company's ability to address increasing demand for large-scale, fast-track power across developing and developed geographies, and increase the company's footprint in natural gas.
APR Energy CEO John Campion said that the transaction will allow the company to move forward rapidly towards delivering its stated medium-term business objectives.
"By creating the world's leading fast-track mobile turbine power business and a long-term relationship with GE, we are well placed to deliver against an underserved and rapidly growing opportunity with the preeminent technology.
"The transaction diversifies our revenue base, gives us exposure to new geographies and sectors, and enhances our natural gas footprint," Campion said.