In a move to further shore up its balance sheet, Rolls-Royce has agreed to sell its subsidiary fuel injection technology firm, L’Orange, to Colorado-based Woodward in a £610m (US$860m) deal. The transaction should be completed by the end of September this year.
According to Rolls-Royce, the sale of L’Orange will “improve resilience” of the balance sheet, with the extra capital being used “to pursue opportunities that will drive greater returns”.
With a workforce of over 1,000 employees, L’Orange is responsible for manufacturing fuel injection products in areas including marine power and propulsion systems. Last year the operation achieved sales in the order of £212m (US$299m).
Colorado-based Woodward designs and manufactures control systems and components for the aerospace and industrial sectors and, on the basis the deal is approved by regulators, the new company will be called Woodward L’Orange.
Andreas Schell, President and Chief executive, Rolls-Royce Power Systems, commented: “Rolls-Royce Power Systems will remain a key customer of Woodward L’Orange.
“We have enjoyed working with L’Orange who have a leading position in their markets, excellent technology, a skilled workforce and strong leadership. We wish them well as they join the Woodward organisation.”
Rolls-Royce, which employs approximately 50,000 staff spread out through 50 countries, announced a return to profit in March. It recorded a pre-tax surplus of £4.9bn for 2017, predominantly thanks to a £2.6bn (US$3.67bn) accounting boost from the strengthening of the Brexit-hit pound.
