(Adds detail, APR and analyst comment, updates shares)
Oct 23 (Reuters) - APR Energy has agreed to buy General Electric's power rental business for $314 million in cash and stock, consolidating its position in the temporary power market and making GE its biggest investor.
London-listed APR, which provides temporary power plants for disaster relief operations, major events and countries that suffer regional electricity shortfalls, will give GE a 16.5 percent stake valued at about $250 million, plus $64 million in cash, to acquire the rental operation within the U.S. group's Power & Water subsidiary.
"This is a financially compelling transaction," APR Energy Chief Executive John Campion told Reuters, adding that it would boost the company's earnings in the first full year.
APR was the top gainer on the London Stock Exchange on Wednesday morning, with the deal sending its shares up 19 percent to 11.34 pounds by 0908 GMT.
"APR is effectively buying the No.3 player in the global power rentals business, so this deal will consolidate the group's position as the second-largest operator in this market," Investec Securities analyst John Lawson said in a note.
A majority of APR's clients are located in developing markets such as Africa, Latin America, the Middle East and Asia, where demand for readily available energy has been increasing.
APR said the acquisition would give it 520 megawatts of power generation capacity, including five associated rental contracts with 20 temporary power generation assets based in Bangladesh, Iraq, the U.S. Virgin Islands, Canada, Australia and Dubai.
GE, meanwhile, said its investment in APR reinforces its strong belief in the distributed power segment.
The deal provides customers with access to fast-track power from APR using GE's technology and the option to buy GE's equipment, said Lorraine Bolsinger, CEO of GE Power & Water's distributed power business.
Reporting by Karen Rebelo and Roshni Menon in Bangalore; Editing by Akshay Lodaya and David Goodman