General Electric announced Tuesday that it is selling its Boston-based energy management system sale division, Current. The sale to American Industrial Partners (AIP) is expected to be closed in early 2019.
Current, powered by GE, sells energy management systems, offering digital productivity solutions for retail stores, commercial use and industrial facilities. The branch, which has been in Boston since 2016, currently operates out of a WeWork space near South Station. GE has yet to disclose a sale price.
Nikolas Noel, spokesperson for Current, wrote in an email that GE is working to simplify its portfolio and position the business for greater success by selling this Boston division. He said the sale of Current to AIP will benefit both parties.
Noel explained that the proposed deal would not only help Current expand, but also accelerate their growth, due to their $4 billion in assets and 30 years of experience in buying, improving and growing businesses.
“我们的技术很好地复合基ments AIP’s existing portfolio, and the firm’s deep expertise in operations and engineering would help us continue accelerating Current’s growth,” Noel wrote.
He wrote that business would go on as usual for all Boston-based Current employees, as the company does not expect any immediate changes.
John Friar, executive professor of entrepreneurship at Northeastern University, said Boston is a great city technological research, but companies still face some obstacles.
“As far as the [research and development] and tech part of the business, Boston is a great place to be, but the operational side is kind of questionable,” Friar said. “It’s more of a challenge.”
AIP’s acquisition of Current comes on the heels of the news that Amazon’s second headquarters, HQ2, will not be headed to the city of Boston. Instead, HQ2 is likely to split between neighborhoods in Queens, New York and Arlington, Virginia.
Amazon declined to comment on innovation and technology in Boston, in light of the decision to go with other cities.
Although Boston is a thriving technology hub, Friar said there is a reason why Amazon chose not to put its second headquarters in the City, as he believes Amazon was looking for a headquarters for workers on the operational, management and fulfillment side, which a city like Boston is not as equipped for.
“At some point, if we ever want to have manufacturing and operations in the state,” Friar said, “we probably have to change our attitude towards licensing and registration and allowing manufacturing to actually take place.”
Friar said Amazon already has a strong presence on the technological side in Boston and that this decision is not reflective of the innovative and technological culture of the city.
“Boston, traditionally, Massachusetts, traditionally, has been a really good hub, but operations usually don’t end up staying in Massachusetts because of high costs,” Friar said. “I think Boston, and again Massachusetts, will continue to be a thriving tech hub.”
CORRECTION: A previous version of this story incorrectly stated that Boston technology companies like General Electric were “pulling away” from the city. The current version of the article has been changed to include this correction.
Very good points by Dr. Friar, but he presupposes that Boston actually would want to become an Operational / Manufacturing hub. Why bother? Stick with your “core competencies” of intellectual capital: Boston / Cambridge area will always have a competitive advantage in this area due to the technology spillovers from MIT, Harvard, Northeastern, etc. Leave the operational / manufacturing side to up and coming high tech hubs like Pittsburgh, PA, Youngstown, OH etc. Solid reasoning re Amazon HQ2 location, but there is a more obvious one for why Arlington VA: proximity to Washington, DC combined with Amazon’s massive economic impact (e.g. jobs, local taxes, etc.) will buy Amazon and CEO Jeff Bezos far more political capital than any lobbyist ever could.