Rolls-Royce to sell ITP Aero to Bain Capital-led consortium for €1.7bn

British engineering company Rolls-Royce has agreed to divest ITP Aero, a Spanish aero engine and gas turbine manufacturer, to a consortium of investors led by Bain Capital Private Equity for nearly €1.7 billion.

Apart from Bain Capital, the consortium includes interests to be held by Spanish co-investors JB Capital and SAPA.

ITP Aero is an aerospace and engine component supplier that has a workforce of around 4,300 people.

The company has a production footprint across Spain, the UK, Mexico, India, and Malta.

ITP Aero is engaged in the design, research and development, manufacturing and casting, assembly and testing of aeronautical modules and engines used in commercial aviation and defense applications.

The company also offers maintenance repair and overhaul (MRO) services for a variety of business jet and defense engines.

ITP Aero had registered revenues of €735 million in 2020.

Earlier this year, Rolls-Royce’s former site at Hucknall in the UK was integrated into the ITP Aero business, with a structured plan to include the related fabrications commodity supply chain in the near future.

Rolls-Royce to sell ITP Aero to Bain Capital-led consortium for €1.7bn. Photo courtesy of ITP Aero.

Ivano Sessa — Managing Director at Bain Capital and Tobias Weidner — a Principal at Bain Capital said: “ITP Aero has a great track record in an industry which is vital to the global economy, with attractive long-term growth potential. 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. We look forward to working with ITP Aero’s management, employees and other stakeholders including the Spanish and Basque governments to realise the significant growth potential that ITP Aero has as an independent company.”

Rolls-Royce said that the sale of ITP Aero is an important part of its disposal program, which was announced in August 2020. The disposal program aims to raise proceeds of at least £2 billion.

The deal is also said to be in line with its strategy of bringing down capital intensity while sustaining a key long-term strategic supply relationship, said Rolls-Royce.

Warren East — CEO of Rolls-Royce said: “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. A financially, technologically, and industrially strong ITP Aero is also vital to Rolls-Royce.

“The company will remain a key strategic supplier and partner for decades to come. We believe we have selected new owners willing to support the business for the long-term and build on its successful track record.”

Post-acquisition, ITP Aero will be a standalone business led by its incumbent CEO Carlos Alzola. The company’s headquarters will continue to be in Zamudio.

The deal, which is subject to customary regulatory clearances and certain closing conditions, is anticipated to be wrapped up in the first half of next year.