GE has signed a contract to acquire Dresser, Inc., a global energy infrastructure technology company. The $3 billion deal is the latest in a series of acquisitions over the last 10 years that has helped expand GE’s energy business, and with it, bring about record profitability. The purchase is subject to customary closing conditions and is expected to close promptly after receiving regulatory approval.
Dresser’s portfolio includes technologies for gas engines, control and relief valves, and measurement, regulation and control solutions for gas and fuel distribution. From its HQ in Addison, Texas, Dresser operates in more than 100 countries. In 2009 it achieved revenues of $2 billion and earnings of $318 million. More than 85% of Dresser's sales are in the energy sector.
“Dresser is a great fit for the GE business model,” said John Krenicki, vice chairman of GE and president and CEO 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 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.”
Notable recent acquisitions include Nuovo Pignone, (oil & gas), Jenbacher (gas engines), Bently Nevada (conditioning and monitoring) and Enron Wind. Dresser’s portfolio includes the former Waukesha Engine, a supplier of natural gas-fired engines competing with GE in what it expects to be a fast expanding market.
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.”
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