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Press releases

Avio
7 August 2006

Cinven reaches an agreement to acquire Avio

Milan, August 7, 2006 - Cinven Ltd (“Cinven”) announces that it has signed an agreement to acquire Avio S.p.A. (“Avio” or the “Company”), the leading Italian aerospace company, from The Carlyle Group and Finmeccanica - Società per Azioni (“Finmeccanica”) for an Enterprise Value of 2.57 billion euros.

Avio is a world leading designer, manufacturer and servicer of subsystems and components for military (Eurofighter Typhoon and F-35 Joint Strike Fighter) and commercial jet engines and a key Tier 1 partner to OEMs such as General Electric, Rolls Royce and Pratt & Whitney. Avio’s Space Business Unit produces propulsion systems for space launch vehicles and missile applications and, together with its joint venture partners, Avio is the sole supplier to the European space programme (including the Ariane programme) of complete solid rocket motors for space launchers. Avio is also the system integrator of the new Vega light launcher. The company’s two other divisions provide jet derivative engines and automation systems for naval and industrial application and civil engine maintenance, repair and overhaul services. Avio is present in Italy and abroad in 16 locations and has over 4,800 employees. In 2006, the Company is forecasting sales of 1,395 million euros and an EBITDA of 275 million euros.

As part of the transaction, Finmeccanica has agreed to reinvest in the Company alongside Cinven.

The transaction is expected to close in October 2006 and is subject to the approval of the relevant competition authorities.

“We are delighted to add to our portfolio a company which is a global leader in its sector and a champion of Italian technological excellence. We are committed in supporting the Company and its outstanding management team by continuing to invest in technology, innovation and growth” said Roberto Italia, Cinven partner in charge of Italy.”

“Avio is a milestone investment for Cinven, being the first in Italy since the opening of our office in Milan earlier this year. It will be the second investment in our 6.5 billion euro fund raised in June 2006” said Simon Rowlands, one of Cinven’s founding partners.

“We are very satisfied with the performance of our investment in Avio and the partnership we had with Carlyle. We are confident that our cooperation with Cinven and the management of the Company will continue to sustain Avio’s growth and development plans”, reported Piefrancesco Guarguaglini, Chairman and CEO of Finmeccanica.

Saverio Strati, CEO of Avio, said: "Avio is in a great competitive position to exploit the opportunities arising from the sustained growth of the global aviation industry. The management team looks forward to working together with Cinven and Finmeccanica to deliver our plans".

The acquisition will be funded through a combination of equity from Cinven and Finmeccanica and debt provided by Banca Intesa, Citigroup, JP Morgan, Lehman Brothers, The Royal Bank of Scotland, and Unicredit.

Cinven was advised by Banca Intesa, Citigroup, Rothschild and Unicredit, while Bonelli Erede Pappalardo, Freshfields Bruckhaus Deringer and Gianni Origoni Grippo & Partners acted as legal advisors.

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