Rolls-Royce has signed an agreement to sell Stuttgart-based L’Orange — a subsidiary of Rolls-Royce Power Systems — to Woodward Inc in a deal worth £610 million.

US-based Woodward is an independent designer and manufacturer of control system solutions and components for the aerospace and industrial markets. L’Orange will be renamed Woodward L’Orange and will be integrated into its industrial division.

L’Orange supplies fuel injection technology for engines used in a wide range of industrial applications, including marine power and propulsion systems, special-application vehicles, oil and gas processing, and power generation.

It serves some of the world’s best-known specialist diesel engine manufacturers, including Rolls-Royce Power Systems’ leading subsidiaries, MTU Friedrichshafen and Bergen Engines, and other low- to high-speed engine builders.

L’Orange will remain an important partner for Rolls-Royce Power Systems through a long-term supply agreement, with an initial term of 15 years.

L’Orange has about 1,000 employees, who are based mostly in Germany; it also has a presence in the USA and China. In 2017, the firm reported revenues of 244 million euros and underlying operating profits of 64 million euros.

Rolls-Royce CEO Warren East (www.rrpowersystems.com) said: “This deal builds on the actions we have taken over the last two years to simplify our business.

The divestiture of L’Orange enables Rolls-Royce Power Systems to focus on other long-term high-growth opportunities, and our company to allocate our capital to core technologies and businesses that drive greater returns for the group.”

The transaction has been approved by the boards of both Rolls-Royce and Woodward.

It is expected to close by the end of June, subject to clearance from the German anti-trust authorities.