Gearheads, you might be proud of the beastly, modified, chromed-up V8 under the hood of your Mustang, Charger, or Camaro. But how about an engine large enough for you and your coworkers to climb on and take a coffee break, or even large enough to climb inside and host a gathering?
That is the scale of engine manufacturing that distinguishes Everllence, an industrial equipment producer that Volkswagen AG has owned since 2018. As the automaking conglomerate sorts out its finances, VW Group today announced it was selling a majority stake of Everllence to Bain Capital. And it was worth a lot of money… billions, in fact.
Engines The Size Of A Cathedral
Ship engine produced by VW Group’s EverllenceVW Everllence
What was originally known as MAN Energy Solutions changed its name to Everllence a year ago (blending “ever” and “excellence”), shifting away from being purely an engine and turbomachinery manufacturer to focus more broadly on industrial decarbonization, large-scale heat pumps, and carbon-capture solutions.
Why pay attention to a deal that has nothing to do with cars from Volkswagen Group or any of its many car brands? Because Wolfsburg began a fire sale months ago in an effort to offset costs, and this Everllence transaction is the latest development. Padding the coffers with cash is the only chance to stave off major plant closures and more job losses than what’s already on the table.
Everllence engine, rotor and compressor assembly in Germany.VW Everllence
VW Group paid about $2 billion in 2018 for the MAN Group’s Power Engineering business (and about $99 million for its US subsidiary). Today, the company announced a sale of $8.4 billion, sending 51% of the company to Bain Capital. That’s not a bad deal.
VW Group will remain a major shareholder, retaining 49% of Everllence. If Bain Capital sounds familiar, Mitt Romney helped found the Boston private-equity firm that now controls $225 billion in assets. The former US senator from Utah (and two-time presidential candidate) retired from Bain Capital in 2002.
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VW Group has been liquidating assets, announcing the sale of Italdesign in December and, this past spring, its stake in Bugatti Rimac and the Rimac Group. Last week, VW Group shed more light on its plans to cut 50,000 jobs by 2030 to be more profitable. VW Group said the sale of Everllence is intended to make both Volkswagen Group and Everllence stronger, with streamlined management.
Everllence engine, rotor and compressor assembly in Germany.VW Everllence
“It will allow us to focus even more strongly on our core business.”
–Oliver Blume, CEO of the Volkswagen Group
CarBuzz Insight – Why This Matters:
Every automaker is looking to bolster its bottom line these days, especially legacy automakers like Volkswagen Group that pivoted aggressively to battery-electric vehicles in a financial bet that has not yet paid off. By selling a controlling stake in Everllence, a company that makes engines the size of cathedrals, VW gains important product-development capital for its vehicle programs.
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That money, plus the proceeds of these recent sales of automotive assets, should help fund the development of new vehicles in a bid for financial stability. But there’s still work to do on this Everllence deal, including safeguarding jobs at the company’s German sites in Augsburg, Oberhausen, Berlin, Hamburg, and Ravensburg. Those jobs and facilities are supposed to be protected until at least the end of 2030.
