Rolls-Royce Agrees €1.7bn Disposal of Spanish Business to Bain Capital-led Consortium

Sep 27, 2021 | News

Engineering giant Rolls-Royce has signed a definitive agreement to sell aerospace and engine component supplier ITP Aero for approximately €1.7bn.

The agreement is with Bain Capital Private Equity, which is leading a consortium of investors. The consortium includes interests to be held by Spanish co-investors SAPA and JB Capital.

The proposed sale was said to be a key element of Rolls-Royce’s disposal programme, announced in August 2020, to raise proceeds of at least £2bn.

Rolls-Royce will receive total cash proceeds of approximately €1.7bn, which will be used to help rebuild the Rolls-Royce balance sheet, in support of the company’s medium-term ambition to return to an investment grade credit profile.

The transaction is expected to close in the first half of 2022.

ITP Aero will be an independent business led by current chief executive Carlos Alzola with headquarters and decision making remaining in Zamudio, Spain

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The consortium’s vision for an independent ITP Aero is to invest in growing the company’s products, regions and customers and further enhance its status as a Spanish national champion. ITP Aero’s partnership with Bain Capital and the consortium will allow it to further drive its strategy to be a pioneer of new technologies and world class manufacturing enabled by a highly skilled workforce.

Rolls-Royce, the Bain Capital-led consortium and ITP Aero are pleased with their discussions with the Spanish and Basque governments about this transaction. The consortium led by Bain Capital supports the maintenance of jobs as well as the company’s future growth.

Bain Capital is also open to negotiate the incorporation of further Spanish and Basque industrial partners in the consortium, representing up to 30 per cent of the equity, until the end of June 2022.

Warren East, chief executive at Rolls-Royce, said: “Today’s announcement is a significant milestone for our disposal programme as we work to strengthen our balance sheet, in support of our medium-term ambition to return to an investment grade credit profile. This agreement represents an attractive outcome for both Rolls-Royce and ITP Aero and we are also grateful to the Spanish and Basque Governments for the constructive discussions we have held with them during the process.

“The creation of an independent ITP Aero is a great opportunity for the company, its people and other stakeholders.”

Carlos Alzola, chief executive at ITP Aero, added: “All of us at ITP Aero are eager to start the next chapter of our story as an independent company with a strong strategic plan and financial support behind us – building on our 30 years of success – to create a global leader in aerospace that is headquartered in the Basque Country in Spain.”

Ivano Sessa, managing director, and Tobias Weidner, a principal, at Bain Capital Private Equity, said: “We see significant potential in further accelerating ITP Aero’s growth trajectory and investments in new technologies. Together with our partners SAPA and JB Capital we think we bring a unique understanding and ability to support ITP Aero.”

Source: Insider Media

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