Rolls-Royce [LON:RR], the UK-based aircraft engine maker, is exploring a sale of its North American naval marine business through financial advisor Bank of America, said four sources familiar with the matter.

The business generates around USD 30m to USD 50m in EBITDA, the four sources said. The asset that would be coming up for sale is part of Rolls-Royce North America. Books have not yet been distributed to prospective buyers, they said.

Private equity firms are expected to show interest in the asset, three of the sources said. Strategics are also expected to look, two of the sources said.

Rolls-Royce’s North American naval marine business is a maker of products such as marine propellers and waterjet components.

In February 2023, Rolls-Royce announced in its FY22 annual report that it was conducting a strategic review to identify investment priorities. This week, the company said it was announcing a group-wide divestment program, targeting gross proceeds of between GBP 1.0bn and GBP 1.5bn over the next five years, for assets which do not form part of its free cash flow targets. The company added that it will only sell assets at the right time and at the right price. For instance, the company went on to say that in Rolls-Royce Electrical, it is looking at options to exit in the short run or alternatively for the right value, reducing its position to minority with an intention to exit fully in the mid-term.

Rolls-Royce is made up of four businesses: Civil Aerospace, Defence, Power Systems and New Markets. Known for its jet engines, the company makes aero engines for the large commercial aircraft, regional jet and business aviation markets. It also manufactures aero engines for military transport and patrol aircraft.

Rolls-Royce has a market capitalization of USD 28.58bn (GBP 22.66bn).

Rolls-Royce and Bank of America declined to comment.