January 13, 2011 – To bring its energy efficiency solutions into the burgeoning cloud and data center markets, GE announced it has signed an agreement to pay $520 million for privately held power conversion provider Lineage Power.

In purchasing Lineage from its parent company, The Gores Group LLC, GE stated it plans to integrate its own power and energy efficiency products with those from Lineage in the $20 billion-per-year power conversion marketplace.

In a news release, GE’s Energy Services division stated the buyout is a result of the greatly expanding interest and investment in cloud computing, smartphones and mobile Internet. GE noted it would also benefit from Lineage’s numerous data center clients.

Doug Washburn, infrastructure and operations analyst with Forrester Research, says the acquisition is a response to our increasingly digitized world, which places “even more importance on energy efficiency and quality within telecommunications and data center environments.”

“Telecommunications and data center operators feel this the most as the consumers and businesses they support accelerate their need for more energy-consuming PCs, mobile devices, and data center servers, storage, and networks,” Washburn says.

Lineage Power CEO Craig Witsoe said in a news release that the move enables his company to pump up its cloud, data storage and data center architecture innovations.

Lineage is based in Plano, Texas and has more than 2,200 employees worldwide. Its customers include many telecom companies as well as HP, Cisco and Oracle.

The acquisition is one of a handful of industry-specific acquisitions GE has made in the last few months to expand its energy portfolio.

Subject to customary closing conditions, GE expects the Lineage Power deal to close in the first quarter of 2011.

To read more on expected growth in the cloud, click here.

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