Rolls-Royce (OTCMKTS:RYCEY) stock is getting a shot in the arm Monday after announcing a major deal concerning ITP Aero.
According to a press release, Rolls-Royce is selling ITP Aero to Bain Capital Private Equity for about 1.7 billion euros. Bain Capital Private Equity is leading a consortium of investors, including SAPA and JB Capital, in the deal.
Rolls-Royce notes that this sale is part of its disposal program announced in late August 2020. The company committed to generating proceeds of at least 2 billion euros in an effort to reduce capital intensity while maintaining key long-term strategic supply relationships.
Rolls-Royce notes that its Board of Directors has already approved the deal, as has the consortium members. The current expectation is for the deal to reach a close during the first half of 20222 after clearing regulatory requirements.
Warren East, CEO of Rolls-Royce, said the following about the deal boosting RYCEY stock higher today.
“Today’s announcement is a significant milestone for our disposal programme as we work to strengthen our balance sheet, in support of our medium-term ambition to return to an investment grade credit profile. 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.”
Heavy trading of RYCEY stock is taking place today alongside the sale news. That’s resulted in some 12 million shares of the stock changing hands. For the record, the company’s daily average trading volume is about 5.8 million shares.
RYCEY stock was up 11.2% as of Monday afternoon.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.