General Electric (GE) has announced plans to acquire the aviation assets of Italian defence and rocket equipment specialist Avio for US$4.3bn.
The deal is subject to regulatory and government approvals and excludes Avio’s space division, which…
General Electric (GE) has announced plans to acquire the aviation assets of Italian defence and rocket equipment specialist Avio for US$4.3bn.
The deal is subject to regulatory and government approvals and excludes Avio’s space division, which provides propellant propulsion systems for satellite launch vehicles.
Avio already provides components for GE’s aviation division, and the group said its acquisition will increase its participation in jet propulsion, one of the industry’s most attractive sectors.
David Joyce, CEO of GE Aviation, said: “We have worked closely with Avio for decades, and we anticipate a bright future together.
“This acquisition is a great strategic fit with our existing portfolio. Avio has technologies, capabilities and outstanding engineers to help grow our business. GE is an excellent corporate citizen in Italy, and we are very excited to grow the relationship.”
Private equity firm Cinven, which owns 81% of Avio, acquired the group back in 2006. State-controlled Italian defence group Finmeccanica owns 14% of the group.
Reports had previously outlined how GE was not interested in Avio’s space assets, and there were suggestions that if they were also acquired they could be put up for sale later, with the Italian Strategic Fund (FSI), which is backed by the Italian government, already in the frame as a possible buyer.
The negotiations with GE progressed after Cinven reportedly ended negotiations to sell the group with its only other suitor, French aerospace group Safran.
The sale comes after Avio’s shareholders unveiled plans earlier this year to list the group on the Italian Stock Exchange. An IPO process started in June with a 12-month window to list a stake.
Avio posted €1.13bn in revenue for H1 2012, up 26% compared with the same period last year. H1 2012 adjusted EBITDA soared 12.7% year-on-year to reach €213.8m.
For the company’s space segment, it recorded H1 2012 revenues broadly flat on the year at €132m.
Avio claims to produce 14% of the European Ariane 5 satellite launcher. It manufacturers two lateral motors and the liquid-oxygen turbo-pump of the rocket’s Vulcain cryogenic motor. The company also acted as a complete systems integrator for the Vega launcher, which completed its maiden flight from French Guyana in February.
It is understood that Cinven hired Rothschild to advise it on a deal.