General Electric Co
The largest U.S. conglomerate said its acquisition of Massy, France-based Converteam would boost its offering of high-efficiency electric devices used across the energy industry.
This acquisition pretty much touches every aspect of our energy portfolio, said John Krenicki, a GE vice chairman who heads the company's Energy Infrastructure unit.
Converteam's products, electric motors that can replace gas-fired engines in oil and gas production, also give GE a chance to build its presence in supplying equipment to the mining and metal-producing sectors, Krenicki said.
There's no reason that we could not have a GE Mining or GE Metals unit similar to what we have with GE Oil & Gas, he said in an interview.
With this deal, GE has reached $11 billion in takeovers over the past six months in the energy industry alone, reflecting an effort by Chief Executive Officer Jeff Immelt to move the company away from its former dependence on financial services and back toward its industrial core.
But the energy unit will not keep up that aggressive pace of acquisitions, Krenicki added.
As you look forward here, our top priority is going to be making these acquisitions work for GE shareholders, not adding to the heap, he said. Asked if the company would continue its torrid pace of dealmaking, he said: Not this pace, no.
GE said it would buy about 90 percent of Converteam from a group of shareholders that include Barclays Private Equity and LBO France. Converteam's existing management will retain a 10 percent stake in the company.
Fairfield, Connecticut-based GE has the right to buy the remaining 10 percent stake over the next two to five years for no more than $480 million, GE said.
Converteam in 2010 generated $1.5 billion in sales, and earnings before interest, taxes, depreciation and amortization were $239 million. It employs 5,300 people.
GE's shares were down 3 cents at $19.72 in trading before the market opened.
(Reporting by Scott Malone; Editing by Lisa Von Ahn and Maureen Bavdek)