Aircraft leasing co. Avolon readies $1.9bn IPO

Major shareholders Cinven, CVC, Oak Hill and GIC will partially exit the Irish company, as well other minor shareholders including USS and Goldman Sachs

A quartet of heavy-hitting private equity backers are preparing for partial exits with the pending public listing of Irish aircraft leasing company Avolon. The company revealed this week it planned to raise up to $314 million with an initial public offering that would value the company at nearly $1.9 billion.

Avolon was founded in 2010 by former RBS executives – it’s led by the founding chief executive of RBS Aviation Capital Avolon, Dómhnal Slattery – and promptly raised $750 million from Cinven, CVC Capital Partners and Oak Hill Capital. Each firm in 2010 committed $250 million in equity to enable Avolon to expand its aircraft fleet and provide sale and leaseback and other financing services to airlines globally. Sovereign wealth fund GIC invested $300 million the following year.

The company manages a fleet of 228 aircraft, including various Boeing 737s, Airbus A320s and Embraer 190. Avolon serves 49 airline customers in 27 countries, and has offices in China, Dubai, Singapore and the US, according to its website. In 2013, Avolon net operating revenues increased 22 percent to $59.5 million compared with $48.9 million in 2012, according to the firm’s 2013 annual report.

Shares are expected to be priced at $21 to $23 per share and underwriters will be able to purchase up to 2.1 million additional common shares from shareholders, according to an Avolon statement. Book runners for the IPO include JPMorgan, Morgan Stanley, Citigroup, UBS and Wells Fargo.

Oak Hill, the company’s largest investor, plans to sell circa 3.85 million of its shares, reducing its stake to 22.5 percent, according to a Securities and Exchange Commission filing. Cinven and CVC plan to sell 3 million shares each, decreasing their individual holdings to just under 18 percent, while GIC plans to sell up to 2.68 million shares – cutting its stake to 15.64 percent in the company. Goldman Sachs also plans to reduce its stake to 1.47 percent, while USS will reduce its stake to 2.95 percent.

CVC, Cinven, Oak Hill and GIC all declined to comment or did not return to requests for comment.

Common shares will be listed on the New York Stock Exchange as ‘AVOL’, with the IPO expected to complete in coming weeks.

Avolon declined to comment.