GE leaps into data center power with $520M acquisition of Lineage Power Holdings

GE has announced a $520 million offer for Lineage Power Holdings (Plano, TX), a specialist in data center AC-to-DC power conversion.

As reported at Reuters, GE last week announced a $520 million offer for Lineage Power Holdings (Plano, TX), a provider of equipment for the $20 billion per year data center and telecom power conversion industry. In buying Lineage from its current owner, private equity firm The Gores Group, the report notes that GE will gain inroads with data center power equipment mega-customers including Verizon and HP, and a revenue stream that yielded $450 million in FY 2010.

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Lineage’s expertise in AC-to-DC power conversion reflects the current trend in data center design of going to all-DC power systems. As the report notes, JPMorgan, Sprint, Boeing, Bank of America and SAP have built all-DC data centers, and GE has also partnered with DC data center equipment maker Validus DC Systems.

According to a 2007 EPA report, data centers used about 1.5 percent of the power generated in the U.S. in 2006 -- a share expected to double by 2012. Pike Research estimates that this could drive a 4x increase in the green data center market to upwards of $40 billion by 2015, with growth driven both by telecoms demand for smartphones and other mobile devices, as well as IT sector cloud computing.

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Reuters notes that Gores Group bought Lineage from conglomerate Tyco for $100 million three years ago; Tyco acquired it from Lucent as part of a $2.5 billion deal in 2000. GE’s acqusition should close in the first quarter of 2011, GE told Bloomberg.

SOURCE: GE Invests $520M in Green Data Center Technologies (Reuters)

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