Babcock International has confirmed talks to take a stake in the helicopter transport firm Avincis, which is likely to value the business at £1.5bn.
The proposal is for a joint venture, with Babcock, a FTSE 100 engineering services firm, taking a stake alongside one or both of the owners of Avincis. Private equity firm KKR and Investindustrial, the Italian buyout group behind Aston Martin, have shared ownership of the company since 2010.
From its London headquarters, Avincis runs operations in 10 countries, flying helicopters for medical and fire-fighting emergencies,civil protection, search and rescue missions, and carrying out coastal and city surveillance. It operates a fleet of helicopters for oil and gas companies in the North Sea through its Bond Aviation Group, which has 23 bases in the UK.
"Following speculation in the press, Babcock ... confirms that it is in exclusive discussions regarding the establishment of a joint venture with respect to Avincis," the firm said in a statement on Sunday. "This initiative is in line with Babcock's stated strategy to grow from its position as the UK's leading engineering support services company in both the UK and overseas. However, there can be no certainty that these discussions will lead to any transaction or any certainty as to the terms upon which any such transaction might proceed."
Babcock, a FTSE 100 company whose activities range from maintaining power plants and railway stations, is understood to be in exclusive talks for a stake which would value the helicopter company's shares at £1bn and its debt at £500m.
KKR bought its 49.9% stake in Avincis in April 2010 for €700m (£585m) including debt.