Triton’s swift investments in building out capacity to meet the strong demand for transmission infrastructure on the back of the AI boom was crucial in delivering a USD 9bn exit for portfolio company Trench Group, the sponsor’s executives told Mergermarket.

On Wednesday (28 October), NYSE-listed energy technology group GE Vernova announced an agreement to acquire Trench Group, a provider of high-voltage grid equipment, in a deal worth USD 9bn.

The exit comes just two and a half years after Triton’s acquisition of the Siemens Energy carve-out in 2024, during which time it invested EUR 200m capex into Trench Group to transform the business, Michael Gahleitner, head of industrial tech, and Steffen Reimund, head of the energy transition sub-sector at Triton said.

The private equity firm approved a EUR 60m investment in a new US manufacturing facility just three months after closing the acquisition, betting that demand for transmission infrastructure would accelerate beyond market expectations.

Triton already saw momentum building in transmission infrastructure as electrification increased demand for power networks. However, it had not anticipated the scale of the acceleration created by AI and data centre investments, Raimund and Gahleitner said.

“We had a high conviction for the asset but did not foresee the degree of the AI boom and the exploding demand for data centres we are witnessing now,” Reimund said.

The private equity firm developed its conviction through earlier investments in transmission and grid infrastructure businesses.

“We had already built-up extensive knowledge of the segment via our investments in Sediver and EQOS and, as a result, had better access to the dynamics of the transmission and grid infrastructure segment than other interested parties,” Reimund said.

At the time of its acquisition of Trench, arranging financing for the transaction proved challenging, illustrating that lenders and investors had not yet fully embraced the growth outlook for the sector.

“People saw the need for investments in the grid driven by the energy transition but at the same time many investors had become sceptical of the thesis and felt like the wave had been predicted for twenty years without a real breakthrough in sight,” he said.

Triton’s acquisition of Trench in 2024 was announced during a turbulent period for Siemens Energy, which was grappling with significant losses and financing challenges related to its Siemens Gamesa wind turbine business. It subsequently secured a EUR 15bn government-backed guarantee package and, as a result, sought to dispose of non-core activities.

“For corporates like Siemens, the speed and quality of execution and constructive dialogues and solutions with employee representatives matter and we were in a good position due to our track record and relationships,” Reimund said.

“We started thinking about potential exit routes very early in the ownership period,” Gahleitner said.

While Triton engaged in talks with interested parties, it was also was transparent that it would simultaneously explore alternative exit routes.

The firm launched a dual-track process with BofA advising on a sale and Morgan Stanley evaluating IPO options, according to Gahleitner.

“The company’s growth trajectory narrowed the range of potential financial sponsors capable of underwriting a transaction significantly, making an IPO a natural alternative.”

Frankfurt and New York were both considered as potential listing venues and the company had already begun enhancing financial reporting and transparency in preparation, he said. An IPO, however, would likely not have been feasible before 2027.

The existence of multiple exit options strengthened Triton’s negotiating position with strategic bidders, which helped securing premium valuations from buyers.

Value creation strategy

A key element in the value creation strategy and in delivering an exit in a short timeframe was the decision for a EUR 60m investment in a new manufacturing facility in the US just three months after it acquired the asset.

“Delaying this would have cost us the opportunity to capture market share in the US market at the time,” Gahleitner said.

Triton also implemented measures such as improving the pricing and go-to market approach as well as financial reporting and optimising the capital structure. The company’s rapid growth prompted Triton to refinance the business twice during the holding period.

Most recently, Trench launched a EUR 1.25bn term loan B that refinanced existing indebtedness and funded an approximately EUR 850m shareholder distribution.

“The growth of the company drove leverage to around 1x, which was not an efficient use of capital,” Gahleitner said. “The aim is always to set up our companies financially for the long term and adjusting the financing structure made sense at the time.”

The refinancing also served another purpose.

“It signalled that we don’t need to deliver an exit right now and can continue generating returns while holding the asset,” Gahleitner said. However, Triton avoids short-term measures designed to maximise exit valuations, he said, adding that strategic buyers value businesses that are well-invested.

“We refrain from window-dressing measures such as temporary reductions in R&D or cost savings. These things tend to make the rounds quickly and we don’t want that kind of reputation.”

Triton acquired Trench via EUR 5bn Fund V, a 2018 vintage fund, for a sum in the mid-three-digit million euros range, according to a Handelsblatt report at the time.

The high-voltage equipment manufacturer doubled revenue to above EUR 1bn during Triton’s ownership, as per the GE Vernova deal announcement. Trench was marketed off EUR 360m EBITDA LTM to March 2026 when raising the EUR 1.25bn TLB earlier this year, as reported by this news service.

Gahleitner described Fund V as a top-quartile performing fund and said, while there are other well performing investments still in the portfolio, Trench is likely to remain the most successful exit generated by the vehicle.

The transaction represents Triton’s fourth significant German exit in the past 18 months following the exits of Fläkt Group and Kelvion from Fund IV and the remaining RENK stake from Fund V.

Trench develops and manufactures high-voltage components used in electricity transmission networks, including bushings, cable terminations, instrument transformers, coils and reactors. Headquartered in Berlin, the company operates 11 factories across eight countries and employs more than 3,000 people.

Triton continues to evaluate opportunities across transmission infrastructure and the broader energy transition sector, although valuations have risen substantially in recent years and strategic buyers remain highly active.

“We think the sector is undergoing a supercycle,” Reimund said.

“This is not a short-term demand peak but a long-term shift in the infrastructure of tomorrow.”