Cinven buys Avio from Carlyle for €2.57bn

Cinven, a European private equity firm, has capped a busy month that has seen it invest in over €8bn of transactions with the purchase of Avio, an Italian aerospace engine maker, from owners The Carlyle Group and Finmeccanica.

The Carlyle Group, a global private equity firm, has sold its 70 percent stake in Avio, an Italian manufacturer of aircraft and naval engines, to Cinven, a European buyout house, for €2.57 billion ($3.3 billion).
 
Finmeccanica, an Italian aerospace, defence and security group, also sold its 30 percent stake in Avio and reinvested alongside Cinven.
 
Cinven has now been involved in just over €8 billion of deals since closing its €6.5 billion fourth fund at the end of June. The firm invested in Dutch cable firms Casema for €2.85 billion and Essent Kabelcom for €2.6 billion alongside Warburg Pincus, a US private equity firm. The two businesses will be merged with Multikabel, which Warburg Pincus acquired for €515 million in December 2005.
 
Last month, PrivateEquityOnline reported that Carlyle and Finmeccanica were considering a sale of the Italian aerospace engine manufacturer despite appointing JPMorgan, Lehman Brothers and Mediobanca in April to prepare Avio for a listing before the end of 2006. According to a source, the two owners still regarded a flotation as a realistic option, despite being in advanced talks with potential buyers.
 
Chiomenti, Gitti-Pavesi-Verzoni, Latham & Watkins and Pedersoli advised Carlyle and Finmeccanica on the sale.
 
Carlyle and Finmeccanica acquired Avio from Fiat Group, an Italian automobile manufacturer, in September 2003 for €1.6 billion, including €500 million of debt provided by Banca Intesa, Citigroup, Goldman Sachs, Lehman Brothers and Mediobaca.
 
Other aerospace investments for Carlyle include Standard Aero, a $1.4 billion acquisition from Doughty Hanson in 2004, Firth Rixson, NP Aerospace and Stellex Aerostructures, which Carlyle agreed to sell to GKN, an aerospace technology business, last week. At the end of July, Carlyle acquired a majority position in Wesco Aircraft Hardware Group, a US distributor of aerospace hardware.
 
Carlyle invested from its 2000 vintage $3.9 billion Carlyle Partners III fund and Carlyle Europe Partners II, which closed on €1.8 billion in 2005. Avio is the third exit from Europe Partners II, following the sale of Terreal, a French roof file and brick manufacturer, to LBO France, a French buyout firm, for €860 million in September 2005; and Saprogral, an animal feed business, sold to Mercapital, a Spanish mid-market private equity firm, for €155 million the same month.