Cinven-backed Avio to launch IPO

Susannah Birkwood
11 May 2011

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Italian aerospace engine maker Avio, a portfolio company of London-based private equity firm Cinven, is said to be keen to launch an initial public offering “as soon as possible”.

The firm hired Rothschild to advise on an exit earlier this month, having sent out letters to around 18 banks several weeks ago. The list of mandated banks for the IPO is expected to be revealed within the next few days.

Sources claim that an IPO - expected to take place on the Milan stock exchange - could value the firm at up to €3.5-€4bn.

Cinven purchased in Avio from private equity giant Carlyle Group and Italian defence group Finmeccanica in one of the biggest Italian buyout transactions of 2006. The deal was worth €2.57bn and saw Cinven acquiring an 81% stake. Finmeccanica's stake of 30% was sold for €430m, but the group bought back a 15% shareholding for a reported €150m.

Avio SpA, a Turinese company, produces and distributes components and systems for aeroplane and helicopter engines. It also assembles turbines for marine propulsion applications and manufactures propulsion systems for launchers and satellites. In 2006, the company generated sales of €1.7bn alongside an EBITDA of €339m.