Cinven fully exits aerospace operator Avio

Amedeo Goria
20 October 2016

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Private equity house Cinven has sold its 81% stake in Italian aerospace propulsion operator Avio to Space2 and Leonardo-Finmeccanica.

Existing shareholders Leonardo-Finmeccanica and the company's management team reinvested in the business. Cinven has now fully exited its investment in Avio, having previously sold the larger aviation-focused arm of the company, Avio Aero, in 2012.

According to a statement, Italian listed special purpose acquisition company Space 2 will acquire two thirds of the company's share capital for €154m, while Leonardo-Finmeccanica will increase its stake up to 28% via a €43m capital injection. Moreover, the management team will buy a 4% stake in the business.

The deal is reported to value the company's enterprise value at €230m. It is expected that the business will merge with its majority shareholder, Space 2, and enter the public market.

Banca Imi will act as sponsor to the flotation on Mercato Telematico Azionario (MTA), part of the Italian stock exchange.

Previous funding
In December 2006, Cinven acquired an 81% stake in Avio for €2.57bn from Carlyle via its Fourth Cinven Fund. At the time of the transaction Finmeccanica acquired a 14% stake, while the management team led by the company's CEO Giulio Ranzo bought a 4.5% stake.

During Cinven's ownership, the company sold its aviation-focused branch, Avio Aero, to US-based GE Aviation for €3.3bn. The deal generated €1bn in proceeds for the GP's fourth vehicle.

Company
Founded in 1912, Avio operates in the aviation and space propulsion sector. The company designs, manufactures and delivers components for commercial and military jet engines, as well as space launcher platforms and propulsion systems for space vehicles.

Headquartered in Colleferro, Italy, the company has five production plants based across Italy, France and French Guyana. It employs 800 people and generated a turnover of €279.2m with €35.5m in EBITDA in 2015, marking a 24.4% increase from the previous year, when it posted revenues of €224.5m.

People
Cinven – Eugenio Preve (senior principal).
Leonardo-Finmeccanica – Mauro Moretti (CEO).
Avio – Giulio Ranzo (CEO).

Advisers
Vendor – Chiomenti (legal).
Acquirer (Space 2) – BonelliErede (legal); Leonardo & co (M&A).
Acquirer (Leonardo-Finmeccanica) – Mediobanca (M&A); BNP Paribas (M&A); Gianni Origoni Grippo Cappelli & Partners (legal).