(Reuters) – German industrial machinery and process engineering group GEA Group has agreed to sell its heat exchangers division, with a value of about 1.3 billion euros (1.0 billion pounds) including debt, to private equity investor Triton.
GEA said on Wednesday it would use proceeds from the sale to make acquisitions in its core business of food processing equipment, which will now account for more than 70 percent of group revenues.
The heat exchangers division makes equipment for a wide range of applications from air conditioning to cooling towers.
The company had put the business up for sale late last year, saying it offered limited synergies with its other operations, which make products such as industrial meat grinders and automatic feeding systems for the dairy industry.
The sale is pending regulatory approval, GEA said, adding it expects the deal to close by the end of the year.
Two people familiar with the matter told Reuters on Tuesday that Frankfurt-based Triton had beat out a rival consortium of buyout group EQT and industrial services group Bilfinger in the auction for GEA’s heat exchangers business.
Triton earlier this month acquired the heat exchanger business of Alstom for 730 million euros.
GEA also reported top-line results for its first quarter through the end of March, posting an organic revenue increase of 6 percent to 951 million euros.
New orders, an indicator for future sales, slipped by 2 percent due to a decline in large orders at GEA’s Process Engineering business, but the group still affirmed an outlook for a moderate increase in full-year revenues.
Shares in GEA were indicated to open 3.1 percent higher, according to pre-market data at 0558 GMT. They ended Tuesday’s trading session at 30.425 euros.