Babcock International to Pay $1.52 Billion For Spanish Aviation Firm

LONDON - Babcock International Group said Thursday that it has agreed to acquire the Spanish aviation services company Avincis for 920 million pounds, or about $1.52 billion, from Kohlberg Kravis Roberts and Investindustrial Group.

The British engineering support services company also would assume £705 million of Avincis’s net debt. The deal valued Avincis at about $2.76 billion, KKR and Investindustrial said.

The deal represents the latest in a series of exits by private equity firms in the past year as stock markets have recovered. Investindustrial invested in Avincis in 2005 and KKR in 2010.

Avincis provides helicopter and fixed-wing aircraft services to civil emergency and fire-fighting operations in Europe, as well as helicopters for the oil and gas industry for offshore platforms in the North Sea and Australia. The company posted revenue of €582 million in 2013 and employs more than 2,800 people. It has a fleet of more than 300 aircraft.

For Babcock, the deal complements services it provides to governments and large companies and fits its strategy to provide specialty technical services that are “critical, complex and bespoke,” the company said.

The addition would help Babcock deliver “mission critical services and complex engineering support to blue-chip customers in multiple geographies,” said Peter Rogers, the Babcock chief executive.

The transaction is expected to be fully funded through a new rights issue by Babcock.

The deal is subject to approval by Babcock’s shareholders and regulators. A shareholder vote is set for April 16 and the transaction is expected to be completed by May 2014.

“Babcock is a great strategic and cultural fit for Avincis,” said James Drummond, the Avincis C.E.O. “Joining forces with Babcock will allow the strengthened group to access new markets and customers, and build on an already impressive order intake.”

Babcock provides engineering services to customers in a variety of sectors, including the defense, energy, transportation and construction sectors. The company had £3.2 billion in revenue through its fiscal year ending March 31, 2013, and employs about 26,000 people worldwide.

JPMorgan Chase acted as Babcock’s financial adviser.