Rolls-Royce has achieved a major step in the restructuring of its manufacturing operations by agreeing to the sale of Spanish subsidiary ITP Aero.
Late last year the British engine OEM said it would transfer some of its aero-engine parts and structures manufacturing from UK facilities to ITP ahead of a planned sale.
That occurred earlier this year, when Rolls-Royce’s former site at Hucknall, UK, was integrated into the ITP Aero business, with a structured plan to include the associated fabrications commodity supply chain in the short term.
This meant that Rolls-Royce would outsource part of its production capabilities following disposal of ITP, which was achieved when a consortium led by Bain Capital Private Equity agreed to pay roughly $2 billion for 100% of the Spanish company.
Rolls-Royce chief executive Warren East confirmed the significance of the move, noting that 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,” he added. Notable by their absence from Rolls-Royce’s disposal plan were the OEM’s maintenance activities and, indeed, the loss of ITP does not deprive it of significant maintenance revenues.
The latest Aviation Week data forecasts that ITP will account for about $75 million of MRO demand over the next five years, compared with about $16 billion for the wider Rolls-Royce group.
ITP’s new owners, meanwhile, have said they want to diversify the company’s customer base and support development of sustainable and low-carbon propulsion technologies.
“We see significant potential in further accelerating ITP Aero’s growth trajectory and investments in new technologies,” say Ivano Sessa, managing director and Tobias Weidner, a principal at Bain Capital Private Equity.
At the end of 2020 ITP Aero reported revenues of €735 million and underlying EBIT of €40 million.
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