GE Vernova’s proposed $9 billion purchase of Trench Group would bring a supplier of essential grid components inside the company. The price deserves a second look: management’s headline valuation of 13 times adjusted EBITDA uses a forecast for 2028. That little date is doing some heavy lifting.
The agreement announced October 28 adds another investment in GE Vernova’s Electrification business. It also gives investors a useful question to ask: how much growth must arrive before today’s purchase price looks like the multiple in the announcement?
What GE Vernova would get from Trench
Trench makes bushings, instrument transformers and coils used in high-voltage electrical networks. These components help connect, measure and manage electricity. They may never enjoy the celebrity status of an AI chip, but the equipment moving electricity around still needs them.
GE Vernova already buys from Trench. Bringing that supplier inside the business could improve coordination and expand manufacturing capacity, rather than simply adding an unrelated product line. The proposed purchase would strengthen its Grid Systems Integration and Power Transmission businesses.
The transaction hasn’t closed. GE Vernova expects completion in late 2027, subject to regulatory approvals and required employee-representative consultations. Its quarterly filing identifies an approximately €8 billion purchase price. The $9 billion headline is a U.S.-dollar equivalent using an exchange rate of $1.12 per euro, so the actual dollar equivalent can change.
The 13-times valuation looks ahead to 2028
GE Vernova’s transaction presentation forecasts Trench’s standalone revenue rising from $1.4 billion in 2026 to $1.9 billion in 2028. Adjusted EBITDA is projected to increase from roughly $500 million to $700 million over that period.
Using those rounded figures, $9 billion divided by $500 million is about 18 times projected 2026 adjusted EBITDA. Divide by $700 million instead and the result is about 12.9 times, consistent with the company’s 13-times headline. Neither calculation uses a completed year’s actual earnings.
That’s a useful comparison, not a verdict that the deal is cheap or expensive. The lower multiple relies on a larger future profit measure. Investors need to judge the manufacturing expansion, customer demand and execution required to reach it.
Adjusted EBITDA also isn’t net income or cash available to shareholders. Trench’s forecasts use its accounting policies and exclude expected synergies, integration costs and purchase-price accounting adjustments. GE Vernova says it can’t reconcile these forecasts to corresponding GAAP measures without unreasonable effort. Our guide to reading adjusted figures alongside their accounting qualifications explains why those labels matter.
Financing costs belong beside the promised benefits
Management expects to fund the purchase roughly half with cash and half with debt, with about $200 million in annual interest costs. It expects the acquisition to improve adjusted EBITDA margin and free cash flow before synergies. Those stated accretion measures are adjusted EBITDA margin and free cash flow, rather than earnings per share.
The presentation also forecasts $50 million to $100 million in cost synergies by 2030, with additional revenue opportunities. I wouldn’t subtract those savings from the interest estimate and call the result the deal’s profit. The figures have different scopes and timing, and the acquired business contributes its own earnings and cash flow.
Likewise, the approximately $5 billion described as backlog and framework agreements isn’t all the same kind of commitment. A footnote identifies $2.6 billion as remaining performance obligations, or RPO. Keeping those categories separate gives us a more useful picture than treating the entire $5 billion as contracted backlog.