KME, which has a 45% stake in Cunova, signed the business combination agreement with German private equity fund Paragon, which owns the remaining 55% of the company, as well as NYSE-listed special purpose acquisition company SEDA.

Under the deal, KME will sell its aerospace business to Cunova and hold around 60% of the combined listed company, while Paragon will fully exit its investment.

The pro-forma enterprise value of the combined company is estimated to be around $736 million, including a net debt of $289 million, and an equity value of about $447 million.

The closing of the transaction is expected in the second quarter of this year.

(Reporting by Cristina Carlevaro, editing Giulia Segreti)