PEORIA, IL - Caterpillar Inc., has signed an agreement to acquire MWM Holding GmbH from 3i and funds managed by 3i. With the acquisition of the global provider of sustainable alternative engines, Caterpillar will expand customer options for sustainable power generation solutions, according to a release from Caterpillar.

Headquartered in Mannheim, Germany, MWM, which stands for Motoren-Werke Mannheim, will become part of Caterpillar's Electric Power Division (EPD). EPD supplies natural gas and diesel generator sets and integrated power systems involved in the generation, control, and supply of electricity. It operates in more than 50 locations around the world.

The integration of MWM will result in important synergies leveraging the two companies' existing product ranges, advanced engine technologies, research and development resources, manufacturing, distribution, and customer support capabilities, according to the release.

The total transaction value amounts to €580 million (approximately $810 million) and will be paid in cash.

Following the repositioning of MWM over the three years since 3i's investment in the company, 3i will recognize an internal rate of return in excess of 25 percent and generate a 2.2x return on its investment.

The acquisition is expected to close in the coming months, pending final regulatory approvals.