Langley Holdings plc, the privately owned UK engineering group, has signed an agreement to acquire Bergen Engines AS, from Rolls-Royce Power Systems AG, a subsidiary of Rolls Royce plc, for an enterprise value of €63 million.
In addition, Rolls-Royce will retain approximately €40 million of cash currently held within the Bergen Engines business and Langley will capitalise the business going forward. The deal is being funded from existing cash resources within Langley.
The company, based in Hordvikneset, near Bergen, in Norway, builds medium speed liquid and gas fuelled engines for the commercial marine sector and naval vessels, as well as for land-based power generation applications.
Bergen Engines employs more than 900 people worldwide including 650 in the main factory in Hordvikneset. The business is expected to generate revenues of approximately €260 million in 2021.
The sale includes the Bergen Engines factory, service workshop and foundry, engine and power plant design capability, together with its global service subsidiaries and network.
The agreement between Rolls-Royce and Langley is subject to the satisfaction of certain closing conditions. Rolls-Royce have notified the Norwegian government of the proposed sale and effective completion is scheduled for 31st December, 2021.
Bergen Engines will become part of a newly formed Power Solutions Division within Langley, together with Marelli Motori, the Italian motor and generator manufactures and; Piller Power Systems, the German critical power specialist.
The sale is a part of an ongoing portfolio management by Rolls-Royce to create a more focused group. Sale proceeds of €70 million from the transaction together with €40 million of cash currently held within Bergen Engines which is to be retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet in support of its medium-term ambition to return to an investment grade credit profile.
Warren East, CEO of Rolls-Royce, said: “We believe that this agreement will provide Bergen Engines and its skilled workforce with a new owner able to take the business on the next step of its journey. The sale of Bergen Engines is a part of our ongoing portfolio management to create a simpler, more focused group and contributes towards our target to generate at least £2 billion from disposals, as announced last year.”
Anthony Langley, Chairman and CEO of Langley Holdings plc, said: “We are very pleased to have reached this Agreement with Rolls-Royce. The acquisition of Bergen Engines is a strategic step in the development of our power solutions division, and I am looking forward to welcoming the 900 plus employees of Bergen Engines to our family of businesses."
Jon Erik Røv, Managing Director, Bergen Engines, said: “Today marks the beginning of a new era for Bergen Engines. Through the investments made by Rolls-Royce in our business, together with our dedicated and skilled workforce, and worldwide reputation for quality, I’m confident that Bergen Engines will prosper with Langley Holdings as our new owners.”
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