The auction of GE Industrial Solutions has moved to the next phase according to a Reuters story. As many know, it was put on the block in mid-December and acquirers lined up to receive “the book” last month. Many are “kicking the tires” and the industry is rift with rumors of who is interested.
We’ve heard of about 10 private equity firms of which some have former GE and other industry executives involved. We’ve also heard a Chinese company had interest, possibly one or two South Korean companies, ABB and Schneider Electric and possibly a few others. Many in the industry have been contacted as bidders seek to do their due diligence.
The Reuters article stated:
European engineering groups ABB Ltd (ABBN.S) and Schneider Electric SE (SCHN.PA) are competing for General Electric Co’s (GE.N) industrial solutions division, which could fetch as much as $3 billion, according to people familiar with the matter.
The divestiture would represent a key step by GE to focus on its core businesses and improve its operational performance, amid pressure from Nelson Peltz’s activist hedge fund Trian Fund Management.
ABB and Schneider Electric are through to the second round of bidding for GE’s industrial solutions business, a provider of primarily electrical equipment, the sources said this week. Schneider Electric is looking for a partner to break up the business should its bid prevail, in order to address any antitrust concerns, the sources added.
Private equity firms, including KKR & Co LP (KKR.N), Clayton Dubilier & Rice LLC, Warburg Pincus LLC and Onex Corp (ONEX.TO), are also in the running, according to the sources.
The sources asked not to be identified because details of the sale process are confidential. Schneider Electric declined to comment, while GE, ABB, KKR, Clayton Dubilier & Rice, Warburg Pincus and Onex did not immediately respond to requests for comment.
Additionally, while all of these private equity firms have no problem raising money, we know that Clayton Dubilier & Rice (CDR) has experience in the electrical distribution industry having been involved with WESCO, Rexel and HD Supply and knows the space and has recently raised a $10 billion fund. And while GE would like to raise $3 billion, private equity firms never pay “cash”.
It’s interesting to see Schneider and ABB reportedly making it to the next round as many expected them to request the book so that they could get an inside peek at the business. With GE having <10% (some sources say closer to 8% of the business), it’s a question of what Schneider would be interested in. From an ABB viewpoint, some have told us there are product conflicts whereas others think it could help jumpstart ABB’s North American switchgear initiative (although they are actively recruiting salespeople / sales engineers) and it is an interesting question to ask how much of an overlap is there between Thomas & Betts and GE Industrial … would it be a good distribution fit.
Historically private equity firms bid more for a company than a “strategic” investor who may be more “informed” about a company. So, the question becomes … and please feel free to respond anonymously …
- Whom would you like to see win the business? ABB? Schneider? A private equity firm?
- What do you think the winning bid will be?
- And to make it fun, either post your number and name or email your name and number to me. I’ll post the number, but not your name, and the person who comes the closest will win a $100 American Express gift certificate. Everyone is eligible but entries must be received by May 5th.
108 Comments
Immelt can wish. Given the investment needed by them, maybe $1.5 billion.
$3.8B- Private Equity Firm
$3.13B CDR
One of the “strategics” at $2.5B
ABB will bag the deal. Too much anti-trust issues with Schneider and they will have to hive off a large part of their existing business.
CDR-talk about opportunistic changes, they also own a large portion of the Rexel Organization, could be an interesting play-out for sure.
Schneider-not as opportunistic as it would be gaining strategic control.
ABB-great bolt-on to their existing offering, make a solid competitor stronger.
2 weeks will tell.
Also heard decision in 2 weeks. GE employees are getting concerned. Salespeople seem to be the only ones with options.
I work in the Mebane NC plant they told us yesterday that ge will no longer be on our checks it will have LLC on them someone out there tell us something ?
I just hope we don’t get screwed because I worked there 24 yrs and have been in 4 layoffs
Abb is actively seeking switchgear people. Maybe they’ve decided to hire rather than buy people?
Whoever gets old Lucent power is getting an empty house
I work at the one in Mebane NC we all are concerned onto why they are changing the name to indutrial resolutions LLC for instead of GE its very weird to all of us i believe their gonna sell our machines one by one cause i hear llc stands for limnited liability company
I’ve worked at GE auburn Maine for 36 years .all those years of dedication.Hope who ever buys us keeps us going.
I work in the West Burlington, Iowa plant and we haven’t heard a thing yet. We have a meeting Wednesday for some information. I have been there more then 20 years and several others have to and we all are concerned about what is going to happen with everything. Over 5 years ago we took a 30% pay cut and several other things was frozen for 5 years to keep our plant open. NOW this! I can’ take another pay cut! Make you wonder if I am ever going to be able to stop worrying and be able to retire. This has been to much stress for all of us in Iowa.
nice that they are making a “game” of this, while the people who work there are being given no information and are worried about their jobs!!
Here’s my take. I would think real sale value will be closer to $1.1 BN. earning of the industrial solution last year was around $100MM, so even the best conservative figure 10x will be around $1 BN worth. Schneider interest would be gain the 8% market share and kill the 3rd/4th competitor from market, industrial solution business do not compliment but pretty much replicate most of their product line. ABB could be serious contender, they don’t have channel distribution or market reach in electrical distribution. My bet is with ABB. It will be the best outcome among all the sale scenario for GE employees
If you think that GE is worried about the Employees over a higher bidder…..you would be mistaken.
I am Sales Manager on LAM and the situation here is difficult. We doesn’t have information about the sales process or the finalist competitors, from the sales new (Dec-2016) nobody knows anything. I see with surprise about a Chinesse Company or South-Korean. We talked with each others and the best option is to be acquired for a company non-related with the Electrical Environment, at least We possible to maintain our Jobs, for other hand Schneider or ABB We could lose our Jobs
Heard they’re working this weekend. Goal is to announce something by mid July at the latest
My background is the UPS business and clearly GE is not putting effort into this business. Most product experts left GE for better jobs. Nor will they support the product after sale. Hoping someone will bail us out but not sure why anyone would want the product.
The decision is already made. Neither Schneider nor ABB. Vive la france!!
Gege, do you mean Legrand? Sounds very interesting. How sure is that info, when will they officially announce?
Hearing Legrand also. Sound a lot like the Westinghouse-Eaton buyout in ’95
90% it will be a private equity firm, last 3 candidates are equity. Will be announced at the end of July.
is that a good thing or a bad thing?
I have heard rumors of virtucon … company owned by some doctor.
It’s all rumor until it’s actually been announced. Just wish they would tell us already!!
I’ve heard rumors of Virtucon also. Something about a division called Preparation H.
Excellent opportunity to consolidate the competition and create more global operations. Definitely an existing electrical distribution equipment manufacturer for $2.1 to 2.3 billion.
has anyone heard for sure yet? getting old being in the dark and not knowing what to expect. it is stressful and putting things on hold in my personal life not knowing what my job will do.
I work for GE Industrial Solutions – Field Services group. I hope whomever buys us loves and appreciates what we can do – the current leadership has no freaking clue how to run this business. The “big conference call” is set for August 3 @ 9AM edst. They will make us wait so Stephanie Mains can be the big star of the hour. What a joke! Again, current leadership has fumbled this football a billion ways to Sunday!
Guys be patient for next 4 weeks. No announcement on Aug3. gonna take time..
Hard to remain patient when you life is on hold….
I used to work for GE Industrial Solutions Field Services Group as well. I immediately started looking right after the announcement. There are much better opportunities out there that pay more and allow for greater career growth. Don’t let GE lock in your life. Move on to bigger and better things. Since the announcement, I personally know at least 4 people (sales and field engineers) who have left and have not looked back. Good luck to all of you. I wish you the best transition.
My son works in the Burlington plant and as someone who has been around manufacturing I was astounded at the age of the machines and the processes that are in place. Whoever buys the business needs to understand that modernization is in order my guess from top to bottom. Hopefully the more senior employees can hang on as needed and to the younger ones remember “people love companies, companies do not love people”.
After some last minute adjustments,the announcement has been moved to tommorrow, Aug 3rd. There will be 30 min Q&A after the IS all-hands meeting to answer any questions you may have about our transition into the future. Thank you for your understanding during these uncertain times.
are you sure
Theyre still selling.
its all fools game..no announcements
I guess it’s not just our local GE that doesn’t have a clue…
Based on today’s meeting, it looks like it most likely will be a private equity firm. It also seems that’s what upper management wants as well.
so is there any place we can read what she had to say
Of course management wants a P/E buyout. They stand a better chance of keeping their jobs vs us peons.
so does anyone know when they will announce who will be buying
ABB-they lost Chloride to Emerson, their acquisition of Thomas & Betts, an upgrade in their channel partners plus the additional leverage of more mindshare at their distribution, the race for IEC dominance in North America vs Schneider. ABB will over pay-the long term view gets them into a space they should be a strong player in North America.
So, is it ABB or a private equity firm?? Surely SOMEbody knows by now!!
am with you peon looks like Ellen, Nikola Tesla or Craig are in the know wish they would enlighten us
My gut feeling is that Its private equity..I am the first Ellen who posted it as waiting period of 4 weeks..and this is my second post
are you implying a decision has been made, and so now in a 4 week quiet period? August 24th or so for announcement?
Updated announcement date as per sources is September last week. Negotiations seem to continue till then.
Sources are wrong if they are sharing dates. The team would never have enough notice to plan an announcement that far in advance
I struggle to comprehend why a PE firm would spends billions on what sounds like a train wreck in the making, then keep the management team that caused it only to watch them piss away millions more through mismanagement. At least the strategics in play actually need and want it, and could cleave off the cancer at the top and restore health and stability.
GE Power Gen sources are saying that the longer this goes on, the less likely we will be sold. Actually this would not surprise me. All I know is that Field Services are losing people left and right. We lost yet another district manager yesterday. People are not happy and the longer this goes on, the worse it’s going to get and I can’t blame people. GE needs to realize that those who do the work are leaving – we need to cut overhead (the fat at the top), treat the ones doing the actual work that pays the bills better, and cut the Incentive Compensation Checks for the mismanagement at the top (Stephanie and company). Funny – since we went up for sale, Q1 & Q2 were phenomenal (according to Stephanie – if you were on that call you know what I mean). We went from screwed up factories and a bad move to SAP to setting the world on fire for profits and margins practically overnight. Ok, people – head scratcher on that one. Don’t you think a potential buyer would notice that?
Simply put, GE management, pull your heads out of the sand; and see/hear what’s actually happening with the business and it’s workers!
If ever the truth was spoken, had enough has done so.
Many of the ge plants have environmental concerns, and the launch of the new breakers doesnt exactly appear to be going well.
I wouldnt be surprised if multiple bidders found some skeletons in their due dilligence.
This is what happens when your management is hired on optics and not performance.
This division is already dead, this is a bidding war over the corpse. The longer it goes on, the more rotten the corpse.
Sounds to me like employees intending to remain need to band together, speak up and make their position known. The management team as described in this string are not who I would want determining my future. Strategics like SE and ABB are the only ones in the hunt with the expertise to stabilize and re-invigorate what you describe. With SE’s ASCO acquisition this seems ABB’s to loose.
This is rather interesting to read.
I was on this call and it’s amazing to me that management believes people are actually listening to these terrible claims of amazing profits.
For the buyer: Currently we are being told eat up all the hours you can, the new owners can deal with the jobs that are losers.
From another call I had with other upper managers: We need to make these jobs look good on the books, just try not to push the customer too hard that they cancel contracts. We have had way too many contracts cancelled lately, we can not afford this any more.
I can tell you this, we are losing great talent FAST (8 people in our district within a 3 month period). Whomever purchases this company is going to have to HIRE or CLOSE businesses as we just can not continue to operate as we currently are.
My advice to anyone still working here- Run as fast as you can to someone else- management claims they are doing their due diligence, however, they do NOT care about the employees.
Whether it’s a P/E or a competitor there will be immediate cost cutting. Employees will not have input or a voice. Someone will have to make the business profitable in short order. Competitor will have an overlap in job structure & products so the easiest cost cutting method is to reduce staff & eliminate low margin products. Same with a P/E. It’s quick and easy to reduce staff. GE is so overly layered with middle management those jobs will be easy to reduce quickly. But at our location no one is working or being productive in anticipation of the eventual decision.
Hearing rumors that it may go into next year before it’s complete. If that’s the case, we would get our vacation, PB and health insurance money again, right???? Plus that lump sum payment that’s supposed to be made in January?? I cannot imagine GE is going to want that to happen!!
From what i was told the buyers all backed out. I never was told who they were but they don’t have a buyer now. Don’t know how true that is but would not surprise me at all.
Hearing Vertiv(old Emerson Network Power now owned by Platinum Equity group) is in the race for Industrial Solutions. They made a good deal out of ASCO sale out of Vertiv and will look for the same from Industrial Solutions. Any update guys?
The solar eclipse has come and gone and GE still hasn’t sold yet.
Guys hearing that ABB is close to acquiring GE IS for value lower than 2B USD..
ABB buys IS and they clean house. We will start to see more managers leaving the company in the upcoming weeks being proactive.
So talks have “restarted.” Curious indeed…
GE wants to sell… nobody wants to buy
It’s hard to imagine what the employees are going through. Those staying are having to pick up the slack for those that left. It sucks, there’s no doubt about that, but it’s having a huge negative affect at the customer level. I just want my place to get back to operations like normal but it would seem that there is no availability for the proper GE employees, and all GE really wants is to get the heck out of here with as little equipment working properly as possible. It feels like a hopeless situation.
it definitely is not the ideal situation to be in. part of me hopes someone buys it and fixes what is wrong with the place which is mostly management. the other part of me does not really care anymore as i have made arrangements to fall back on other things. just ready to know one way or the other. when no one will tell you anything best just to prepare for the worst and hope for the best. not sure what really is the best in this situation.
No need for many of us to imagine – we’re living it. Morale is pretty low, uncertainty weighs heavily. The worst part is the freeze on any employees inside IS going to other GE divisions, and similar freeze on folks from other GE divisions coming into IS….it started when the sale was announced (Dec 2016), and it extends to 12 months AFTER the deal closes. So our choices are stay in IS and wait it out….or leave GE entirely.
Wow, that’s kinda crazy. Don’t just leave, but leave and never come back. Sounds like a divorce with a restraining order!
Yea, it does sound like that. Many of us are more considering it like indentured servitude – we’re either in IS business, or leave GE. The entire rest of GE is off limits.
See my Jul 13 comment
Excellent opportunity to consolidate the competition and create more global operations. Definitely an existing electrical distribution equipment manufacturer for $2.1 to 2.3 billion.
Sounds more along the lines of GE is wanting out and ABB wants it cheap. Maybe, just maybe, this will be the end and ABB will do it.
For those who read this posting, have been sharing comments or posting information, we’ve written a new post on the proposed sale of GE Industrial Solutions. You can read it, and comment if you’d like, at https://electricaltrends.com//2017/08/ge-and-abb-doing-the-tango.html.
Awww, just when this was about to heat up. I read the other is a very good posting. Great summation, thought provoking and some poignant questions.
no comments in a week? No rumors?
I work at the plainville location, ABB is the buyer…you heard it here first
Are you sure about it? Nothing is coming out of ABB either. Some GE IS guys said do not buy IS because it was dismantled and is hollow shell now.
As the customer of a very overdue project, IS is hollow and can not keep up with the workload because so many have left the company.
how sure are you of this? it would be nice to find something out very soon.
will they buy all the plants or just pick ones they want we all know they dont need all of them they already have many of their own plants
It’s an all or nothing sale. No choosing pieces and parts.
any news?
Private equity firms are looking at it again along with abb
local ge – how do you know that private equity firms are looking at it again? I had just heard ABB in the news
Heard what I consider to be a total rumor about platinum equity. something about vertiv mgmt and someone at GE IS, not in upper mgmt, fancying themselves switchgear experts. if it is true, and it’s the people I’ve heard, you’ll wish for the current mgmt back. ABB will be able to pick it all up at an asset fire sale in a cpl years.
was told that in our meeting by plant manager so must be true
That would be a sad outcome. They’ll split it up and sell the pieces. Need look no further than ASCO, and the other pieces they’ll sell soon. Vertiv too will be sold. Just a matter of ‘when.’
heard last night that possible announcement next week that deal has been reached with ABB ….guess now wait and see
Anything new?
we are told we will have a all plant meeting next week
Rumor has it that ABB has offered $1.8B and GE is asking for $3B. I say, “Take the money and run!” I think GE has way over- valued IS. If we were worth that much and brought in the money they claim then they wouldn’t want to get rid of us. I beg, “PLEASE, GE cut us loose so we can be a part of a real team and a real company that will appreciate what we can do and who we are. Go play with the whirlygigs and solar panels, let us go be the industrial power house we once were. We have struggled to live with all of your cuts and not understanding the business. We are at critical mass more than ever. The longer this goes on, the more talent we are going to lose. You can not afford that. And as an employee I can’t afford that either.” Just wish they would drop the smoke and mirrors act, realize that nobody else is stepping up, and get this over!
GE Is Said to Near Industrial-Solutions Unit Sale to ABB
Finally. Just cannot believe ABB will pay that much for it. Hope it will be buy-it-all deal. Just wait for the official announcement.
They keep saying no option to break it up.
after the sell they will have to do some plant closing of ge plants or abb plants they cant need that many and ge has many empty and half full plants now and hopefully get rid of much of waste full ge mangers
IN ABB’s latest report, the chairmans’ notes included a phrase like “addressing costs and overcapacity.”
Yay!!!! It’s done!! ABB!!
Big muckity-mucks meeting in Atlanta on Monday!!
Woohoo!
Hope ABB likes dealing with highly disgruntled employees because they are about to inherit a boatload after what all we’ve been through with GE. A good start will be to oust Stephanie and the next 20 layers of wasteful management that’s run IS into the ground the last several years.
And to have all these little factories with more managers than the people actually building product is wasteful. HR has always been top heavy.
If ABB thinks they are going to “whip us into shape” then too late. We’ve already been whipped.
GEanon hope their ok with us standing around all week so we can work ….well at lease come in for overtime
http://news.cision.com/abb/r/abb-to-acquire-ge-industrial-solutions,c2352996
http://new.abb.com/news/detail/2117/abb-to-acquire-ge-industrial-solutions
Announced!
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