Leonardo announces the sale of the “Underwater Armaments & Systems” underwater business to Fincantieri

(To Leonardo)
09/05/24

Today Leonardo announces that it has signed a binding agreement for the sale of the Underwater Armaments & Systems (UAS) business line to Fincantieri for an amount based on an Enterprise Value composed of a fixed component of €300 million, subject to the usual mechanisms of adjustment, and by a variable component for a maximum of €115 million upon the occurrence of certain performance objectives for the year 2024, for a total Enterprise Value equal to a maximum of €415 million. Closing of the transaction is expected in early 2025 and is subject to typical authorizations for this type of transaction. “The sale of Underwater Armaments & Systems is part of the plan to rationalize Leonardo's business portfolio. The initiative gives further impetus to the collaboration between Leonardo and Fincantieri, within the framework of more effective global defense and competitiveness.” - declared Roberto Cingolani, CEO and DG of Leonardo.

Underwater Armaments Systems

Whitehead Alenia Sistemi Subacquei SpA, a historic 100% subsidiary of Leonardo, was founded as a company specialized in the construction of submarine defense systems and in particular torpedoes, countermeasures and sonar. In early 2016, the company merged into Leonardo, becoming a business line, and was renamed “Underwater Armaments & Systems” (“UAS”). The business line also includes 50% participation in the EuroTorp EEIG (established with Naval Group and Thales), dedicated to the design and construction of the MU90 light torpedo, and is located in two locations, Livorno and Pozzuoli. In 2023, the UAS business line generated revenues of approximately €160 million and EBITDA of €34 million.

consultants

For the purposes of the operation, Leonardo was assisted by Rothschild & Co. as financial advisor, by Studio Cappelli RCCD, as legal advisor, and by PwC in the preparation of the financial documentation of the branch. UBS supported Leonardo's Risk Control Committee in evaluating the transaction, providing a fairness opinion on the economic terms of the transaction.

Transactions with Related Parties

For Leonardo, the described Transaction, given the correlation relationship between Leonardo and Fincantieri (both companies controlled by the Ministry of Economy and Finance), constitutes a Related Party Transaction of "lesser relevance" pursuant to the current regulations and the Procedure adopted from society. The Transaction was approved by the Board of Directors of Leonardo following a reasoned and unanimous favorable, non-binding opinion expressed by the Control and Risk Committee in the exercise of the functions carried out in its capacity as Committee for Transactions with Related Parties, in relation to the interest of the Company upon completion of the Transaction as well as the convenience and substantial correctness of the relevant conditions.