Volkswagen Sells Majority Stake in Everllence to Bain Capital

Automaker Volkswagen Group has agreed to sell a majority stake in its storied diesel engine division, Everllence - previously known as MAN Energy Solutions - to the American private equity giant Bain Capital.

Everllence - formerly a division of MAN SE - can trace its roots back to the start of the Ruhr Valley iron smelting industry, but its engineering history is centered in Bavaria. MAN's Augsburg plant sponsored Rudolf Diesel's experiments in the late 1890s, fostering the invention of the diesel engine and the beginning of modern industrial power systems. MAN later became a leading maker of marine diesels through the acquisition of Burmeister & Wain in the 1980s, and was itself acquired by Volkswagen in 2011. The marine-diesel business was spun out of MAN SE as MAN Energy Solutions in 2018, placed under VW's direct ownership, then (last year) renamed Everllence.

Today, it is a top manufacturer of large diesels for marine propulsion and power generation, and it also makes turbochargers and low-carbon power systems. Like others in the medium-speed segment, its fortunes have been boosted by the outsize power demands of data centers, which are growing so quickly and have such demanding requirements that they often require their own supplemental power generation.

After six years of successful restructuring, Everllence has revenue of about $5 billion and a book value of $3.9 billion. Volkswagen Group has agreed to sell 51 percent of its stake in the company to Bain for about $8.4 billion in a leveraged buyout. VW says that it plans to retain the remaining 49 percent "in the medium term."

"Leaner structures and processes will give Everllence the opportunity to achieve further growth in attractive markets such as data centers, the energy sector and shipping. At the same time, it will allow us to focus even more strongly on our core business," said Oliver Blume, CEO of the Volkswagen Group.