Global private equity firm Cinven said it agreed to sell Avio Space Propulsion, a European space launcher and space propulsion operator, to Italy’s Space2 (BIT: SPA2) and Leonardo-Finmeccanica (BIT: LDO) together with Avio’s management. The deal is said to value Avio at €160 million.
Leonardo-Finmeccanica said it would double its stake in Avio and increase it’s equity share from 14% to 28%. The total price to be paid by Leonardo-Finmeccanica is €43 million, it said.
The deal will be implemented through a combination between Space2, a special purpose acquisition company, currently listed on the Italian Stock Exchange MIV/SIV segment, and the merger of Avio into Space2, with the subsequent listing of Avio.
The completion of the merger and subsequent listing of Avio are expected by the first quarter of 2017 subject to customary closing conditions.
Avio will receive €66 million in additional cash to support its development plans, said Leonardo.
Avio is a leader in space transportation technology, with system integration capabilities in propulsion for space launchers and missiles, as well as complete launchers (Vega). Avio produces the Ariane 5’s boosters, consisting of two large lateral solid-propellant engines which produce most of the thrust required for take-off.
Avio Space Propulsion, is headquartered in Colleferro, Italy and has operations in Italy, France and French Guyana. It employs over 800 people, of which one third are involved in R&D activities. In 2015, Avio Space Propulsion generated revenues of €279.2 million (2014: €224.5 million) up 24.4%, Cinven said.
“Through the development of the Avio business and increasing the relative stake, Leonardo-Finmeccanica will strengthen its positioning in the space business, consolidating its role in the launchers segment, also for small satellites,” said Leonardo-Finmeccanica chief executive Mauro Moretti.
Leonardo-Finmeccanica is a global Italian aerospace, defense and security company headquartered in Rome, with more than 47,000 employees and operations worldwide.
“Cinven’s investment in Avio has enabled the business to grow successfully, to capitalise on the exciting market opportunities in the space industry, and to continue investing in R&D to create sustainable growth in the future,” said Giulio Ranzo, CEO of Avio. “We now look forward to working with Space2, alongside Finmeccanica, as our new shareholder, as we enter our next phase of growth.”
Cinven originally acquired Avio from Carlyle in December 2006, alongside Finmeccanica as a minority shareholder, for €2.57 billion. At the time of the acquisition, the group comprised both aviation and space businesses.
Avio Group was a world leader in the design, manufacture and servicing of components for commercial and military jet engines, as well as the production of space launcher Vega and propulsion systems for space vehicles such as the Ariane rocket.
Avio’s aviation business was sold to GE in August 2013 for €3.3 billion, generating €1 billion of value for the fourth Cinven fund. The firm is focused on six sectors: Business Services, Consumer, Financial Services, Healthcare, Industrials, and Technology, Media and Telecommunications (TMT).
Cinven was founded in 1977, and has offices in Guernsey, London, Frankfurt, Paris, Madrid, Milan, Luxembourg, Hong Kong and New York.