GE Vernova agrees to buy Trench for about 9 billion dollars
GE Vernova signed an agreement to acquire high-voltage equipment maker Trench Group, with completion expected in late 2027 subject to regulatory approvals. The price is equivalent to about 9 billion dollars. Trench brings grid technology and a combination of backlog and framework agreements, as the buyer expands its electrification business amid growing demand for electricity infrastructure.
Economics & Markets··Evening
Trench adds high-voltage equipment
GE Vernova, the electricity equipment and services company, signed an agreement in October to acquire Trench Group, a manufacturer of high-voltage grid equipment and insulating components. The announced consideration is equivalent to approximately 9 billion dollars. Completion is expected in late 2027, subject to regulatory approvals. The company plans to add Trench to its electrification business, expanding the equipment it can offer electricity infrastructure customers. Trench’s products include bushings, the insulating components used in high-voltage equipment. The transaction was announced alongside GE Vernova’s third-quarter financial results on October 28.[1], [2]
Price uses expected 2028 earnings
The acquisition price represents 13 times Trench’s expected adjusted earnings before interest, taxes, depreciation and amortization for 2028, before synergies. GE Vernova calculated the dollar equivalent using an exchange rate of 1.12 dollars per euro. Actual dollar amounts could change with the exchange rate prevailing at the relevant time. Chief executive Scott Strazik said Trench had about 5 billion dollars in backlog and framework agreements, with some extending into the next decade. That figure combines backlog with framework arrangements. Strazik linked the acquisition to expansion of GE Vernova’s electrification capabilities and its ability to serve global customers.[1]
Cash balance supports investment plans
GE Vernova ended the quarter with 16.8 billion dollars of cash, after generating 6.1 billion dollars from operating activities and 5.4 billion dollars of free cash flow. Chief financial officer Ken Parks said the cash position increased confidence in making growth investments and returning capital to shareholders. Demand for electricity infrastructure accompanied expanding equipment orders in the Power and Electrification businesses. Total quarterly orders reached 29 billion dollars, while backlog rose by 20 billion dollars from the preceding quarter to 197 billion dollars. Management said gas equipment backlog and slot reservations increased from 116 to 122 gigawatts, with at least 130 gigawatts expected by year-end. Parks highlighted favorable pricing and disciplined underwriting as contributors to the margins in the growing backlog.[1]
Related columns
For more information on this topic, you can read the related columns.
