GE (NYSE: GE) announced Thursday it will acquire Lineage Power Holdings, Inc.–a company specializing in energy efficiency for data centers–for $520 million.
The acquisition confirms predictions by numerous industry watchers that data center efficiency will be a hot sector in 2011.
Lineage Power had revenues of approximately $450 million in 2010, and is owned by The Gores Group, LLC.
The deal will open the door for GE Energy technology to be deployed in the $20 billion per year power conversion space, where the demand for reliable, high-quality power is driven by the growth in cloud computing and mobile internet voice, video and data applications.
Lineage Power customers include: AT&T (NYSE: T), Verizon (NYSE: VZ), Alcatel-Lucent (ALU.PA), Cisco (Nasdaq: CSCO), Hewlett Packard (NYSE: HPQ) and Oracle (Nasdaq: ORCL).
The deal is expected to close in 1Q11, subject to customary closing conditions, including receipt of regulatory approval. Lineage Power is headquartered in Plano, Texas, and has nearly 2,300 employees, with manufacturing operations in China, Mexico and India.
“According to recent studies, there will be 1.1 billion smartphones sold globally by 2013,” said Dan Heintzelman, GE Energy Services president & CEO. “Every new mobile device plugs into an infrastructure that requires an ever increasing amount of high-quality power. The growth in high-bandwidth mobile internet applications and cloud computing is accelerating that demand. A globally networked planet needs a lot of power to keep spinning. Customers want efficient, reliable means to manage that power.”
Heintzelman adds, “As the data-driven economy grows, the addition of Lineage Power’s business platform continues the expansion of GE Energy’s offerings from the electric grid to datacenters, cell towers, routers, servers and circuit board electronics.”
Lineage Power CEO Craig Witsoe said, “Our leadership in high-efficiency power conversion solutions has positioned us to serve the explosive growth in mobile internet demand driven by 3G and 4G/LTE wireless networks that enable the Amazon® Kindle™, Apple® iPhone® and iPad™, Google® Android™ smart phones and other mobile devices. We are also bringing to GE exciting new solutions for high-efficiency datacenter architecture, data storage and cloud computing.”
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