GE Vernova pays $9 billion for Trench Group hours after beating its own guidance

GE Vernova▼−0.89% — GE Vernova, down 0.89 percent today beat its own hype on Wednesday morning, and then reached for its wallet. The gas-turbine and grid-equipment maker posted third-quarter earnings per share of $4.81 against a $4.00 consensus↗, revenue of $12.64 billion against $12 billion expected, and raised its full-year revenue guidance to $46.5-47.5 billion ².

Hours later it signed a deal to buy Trench Group, a German maker of high-voltage grid components, for $9 billion from private-equity firm Triton Partners, funded half in cash and half in debt, with the closing expected in late 2027 ¹⁵. The stock, up around 2.5 percent Tuesday ahead of the print, rose about 4.7 percent on the news ³⁶.

The second grid purchase in eight months

The acquisition is GE Vernova's second grid supply-chain purchase in eight months, after it paid $5.275 billion in February for full ownership of transformer maker Prolec ³. Chief executive Scott Strazik called Trench's technology and customer relationships key enablers of the "electricity supercycle" ⁵.

Cashing out at 13 times a forecast year

The press release states the price equals 13 times Trench's forecast 2028 adjusted EBITDA↗, before any synergies are counted ⁵. Trench expects $1.9 billion of revenue at a 36 percent adjusted EBITDA margin in 2028, figures GE Vernova prepared from data supplied by Trench itself ⁵.

Since winning independence in April 2024, Trench has doubled annual revenue past 1 billion euros, serving more than 800 utilities and hyperscalers ⁵. The sellers, in other words, are cashing out at the top of the grid buildout, and the buyers know it: that is what 13x of a forecast year means ⁵.

Orders up 96 percent, backlog at $197 billion

The bull case has receipts. Orders hit $29 billion in the quarter, up 96 percent organically, and backlog grew $20 billion sequentially to $197 billion↗ ⁶. Data centers booked more than $5 billion of orders in the first half and were nearly 40 percent of new grid-equipment orders; management expects that share to fall toward 20 percent in the second half even as the data-center backlog keeps growing ³.

Owning the bottleneck, the argument runs, locks margin under a backlog that already reached $176 billion plus 53 gigawatts of firm turbine orders in June ³. The bear case is timing. The stock still trades roughly 26 percent below its July peak ³, and the company is spending about $14.3 billion on two grid acquisitions↗ at what may be the cycle's most expensive moment, half of it borrowed ¹³. A seller taking a two-year close says little about where equipment pricing goes in 2028 ⁵.

Whether grid pricing holds into 2028

What settles it is readable in the quarterly print: whether data-center orders convert at the pace Strazik promised, and whether margins in GE Vernova's Electrification segment, its grid-equipment division, keep expanding with Trench folded in. The next readings are the closing GE Vernova expects in late 2027 ¹ and the quarterly reports between now and then. The deal's value depends on whether grid-equipment demand and pricing hold into 2028; if they do, the 13x multiple is cheap for scarce capacity, and if they do not, the sellers got the better end ¹.