Mon, 09 Apr 2018 | BUSINESS SALE
Rolls-Royce has announced it will sell its fuel injection company L'Orange to US firm Woodward in a £610 million deal as part of its plans to boost its balance sheet and boost the capital available to the firm for use in pursuing opportunities that will provide greater returns.
The sale of the Rolls-Royce Power Systems subsidiary has been backed by the boards of both firms in the hope it will "improve the resilience" of the company's profits and is expected to be completed by June 2018.
The sale will take place under the leadership of chief executive and former ARM chief Warren East, who began selling some of the company's assets when its fell in financial trouble two years ago.
Commenting on the forthcoming sale, Mr East stated that it would enable Rolls-Royce to apply greater focus on other high-growth opportunities and to ensure funds are allocated to developing core technologies that provide strong returns in the long-term.
"This transaction builds on the actions we have taken over the last two years to simplify our business," he said. "We have enjoyed working with L'Orange who have a leading position in their markets, excellent technology, a skilled workforce and strong leadership. We wish them well as they join the Woodward organisation."
Rolls-Royce announced a return to profit in March 2018, marking a significant recovery following its fall into the red by £4.6 billion in 2016. As well as benefitting from division sales, the company also gained a £2.6 billion accounting boost as a result of the strengthening of the pound.
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