Italy’s Leonardo to Raise Up to $807 Million From DRS Unit IPO

Leonardo SpA, Italy’s largest aerospace company, is set to raise as much as $807 million from the initial public offering of its U.S.-based defense electronics systems manufacturer.

The IPO of Leonardo’s DRS division will comprise 31.9 million shares offered at a price range of $20 to $22 per share, the company said in a statement Monday.

DRS won’t receive any proceeds from the offering. Following completion, Leonardo’s U.S. holding is expected to own 78% of the issued and outstanding shares of common stock in DRS, the company said. Bloomberg News first reported Leonardo was considering an IPO for its DRS unit.

Leonardo has remained focused on restoring margins to improve cash generation during the pandemic, while demand for military equipment fuels revenue and profit growth. The company earlier this month forecast 2021 earnings before interest, taxes, depreciation and amortization ahead of analyst estimates.

Mediobanca is advising Leonardo on the IPO. Goldman Sachs & Co. LLC, BofA Securities, and J.P. Morgan will act as lead bookrunning managers. Barclays, Citigroup, Credit Suisse, and Morgan Stanley will act as bookrunning managers and Credit Agricole, IMI-Intesa Sanpaolo, MUFG and UniCredit Capital Markets will act as co-bookrunners for the proposed offering.

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