GE’s $520M Acquisition Into Data Center Power

General Electric (s GE) is grabbing a piece of the booming business of providing power for the ever-expanding data center industry. On Thursday, GE announced a $520 million offer for Lineage Power Holdings, a provider of gear for data center and telecom power conversion, which is a $20 billion-per-year industry.

By buying the Plano, Texas-based Lineage from its current owner, the private equity firm The Gores Group, GE will get a hold of data center power equipment customers including Verizon (s VZ) and HP (s HPQ), as well as a revenue stream that stood at $450 million in fiscal year 2010. It will also gain an in-house provider of inside-the-building gear for its growing data center business and related power grid businesses, which stretch from power generation to energy distribution grids.

GE has been making investments lately in data center-focused technologies; power conversion devices being just one area. GE has invested multiple rounds into wireless energy sensor startup SynapSense, and has been offering engineering and management services for more energy-efficient data center construction and retrofit projects for years now.

Lineage’s roots in AC-to-DC power conversion could give it a boost in a growing trend amongst data center designers: going to all-DC power systems. JPMorgan (s jpm), Sprint (s s), Boeing (s ba), Bank of America (s bac) and SAP (s sap) have built all-DC data centers, and GE has partnered with DC data center equipment maker Validus DC Systems.

In the meantime, rivals in the power grid space such as Schneider Electric (s SU) and ABB have been making their own moves into the data center realm. Data centers used about 1.5 percent of the power generated in the U.S. in 2006, but that share was expected to double by 2012 to add up to $7.4 billion in annual power bills, according to a 2007 EPA report.

That could drive a fourfold increase in the green data center market to some $41.4 billion by 2015, Pike Research estimates. Growth has been driven both by telecom-focused growth in smartphones and other mobile devices, as well as through innovations in the traditional IT sector such as cloud computing.

Gores Group bought Lineage from conglomerate Tyco (s tyc) for $100 million three years ago, and Tyco acquired it from Lucent (s alu) as part of a $2.5 billion deal in 2000. GE’s acqusition should close in the first quarter of 2011, GE told Bloomberg.

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