- GE Vernova agreed to sell its Proficy manufacturing software business to TPG for a US$600 million base price plus potential contingent proceeds.
- Proficy represents about 20% of GE Vernova’s Electrification Software revenues and serves more than 20,000 industrial customers.
- GE Vernova plans to reinvest proceeds into its grid software strategy, including its GridOS platform, to help offset expected 2025 inflation and tariff cost headwinds.
- The deal is expected to close in the first half of 2026, with TPG taking control and GE Vernova retaining a board observer seat.
Read More
From an investment banking perspective, this transaction reflects a multi-faceted strategy by GE Vernova to sharpen its portfolio, unlock value, and reinforce its positioning around core competencies. GE Vernova spun off recently after splitting from General Electric, and its priorities now include strengthening its Electrification segment and scaling its grid software offerings while shedding non-core assets like Proficy.
Valuation & deal structure: The US$600 million base purchase price is modest relative to Proficy’s contribution to Electification Software revenues (~20%), implying GE Vernova’s electrification software revenues in 2024 were ~US$7.55 billion. For a unit that’s being carved out, this valuation suggests either modest margins, lower growth expectations, or the need for additional investment to scale. The potential for earn-outs or condition-based additional proceeds suggests the buyer is risk-sharing future performance.
Strategic rationale for GE Vernova: Inflation and tariff pressures expected to add US$300–400 million to costs in 2025 are making margin protection urgent. The Proficy divestment provides near term liquidity and allows redeployment of capital into higher growth or more strategic software areas, particularly grid software, where electrification & decarbonization trends are accelerating. Investments in factory upgrades also reflect capital allocation to operational resilience and supply chain risk mitigation.
TPG’s opportunity and risk: For TPG, acquiring Proficy offers exposure to industrial IoT/manufacturing software: HMI/SCADA, MES, data analytics etc., serving over 20,000 customers across manufacturing, infrastructure, and transit. However, the business likely has legacy architecture, technical debt, and stiff competitive pressures from cloud-native platforms. TPG must invest to modernize and scale. Also, with GE retaining a board observer role, the disentanglement risk may be mitigated but not eliminated.
Market & financial implications: The transaction may impact GE Vernova’s financial metrics: Selling a business contributing 20% of Electrification Software segment revenue could reduce revenue but may improve segment margins if Proficy was lower margin. Investors may view the carve-out favorably if it accelerates growth in grid/energy software and strengthens ESG positioning. For TPG, this becomes a bet that Proficy can scale as a standalone entity, driving sufficient growth and productivity to generate returns exceeding carve-out risk and investment required.
Open questions include: What are Proficy’s profitability, gross margins, and growth rates (historical and forecast)? How much CAPEX and R&D investment will be required to modernize its product stack (e.g., cloud-native, AI)? What is the competitive landscape in industrial software? How separable is the business operationally from GE Vernova? How will customer retention and licensing agreements be affected by the ownership change?
Supporting Notes
- GE Vernova and TPG signed a binding agreement for Proficy sale at US$600 million; GE may receive additional proceeds under certain outcomes. Expected close in first half of 2026.
- Proficy constitutes about 20% of GE Vernova’s Electrification Software revenues; the Electrification segment had US$7.55 billion revenue in 2024.
- GE Vernova forecasts US$300–400 million in increased costs for 2025 due to inflation and tariffs; plans include price increases and cost discipline.
- GE Vernova plans to reinvest proceeds from the divestiture into grid software, including development of its GridOS AI platform.
- Proficy serves over 20,000 customers and provides integrated industrial manufacturing software: HMI/SCADA, MES, data management, analytics, both cloud-based & on-premise deployment models.
- Deal advisors: Evercore & Morgan Stanley for GE Vernova; Centerview & William Blair for TPG.