By Milana Vinn

NEW YORK (Reuters) -Boeing said on Tuesday it would sell portions of its Digital Aviation Solutions business, including navigation unit Jeppesen, to private equity firm Thoma Bravo for $10.55 billion.

The U.S. planemaker will retain the core digital capabilities from the business that harness aircraft and fleet-specific data to provide commercial and defense customers with fleet maintenance, diagnostics and repair services.

The sale is a part of CEO Kelly Ortberg's plan to reduce Boeing's debt by offloading non-core assets. Its shares closed up about 2%.

Jeppesen attracted interest from private equity firms and at least one aerospace supplier, with final bids valuing it at more than $10 billion. 

The sale price valued Jeppesen at roughly 16 times its 2025 earnings before interest, taxes, depreciation, and amortization, according to a person familiar with the matter.

The deal is being financed with the help of a $4 billion loan package from direct lenders, the source added.

Thoma Bravo won the Jeppesen auction, edging out rival buyout firms such as TPG, Advent and Veritas, according to five sources, who requested anonymity as the matters are confidential.

The deal ranks as one of the biggest carve-out transactions in the recent past. Ball Corp in 2023 sold its aerospace assets to Britain's BAE Systems for about $5.6 billion.

In February, British Airways said it was buying Boeing's maintenance operation at Gatwick Airport near London. Boeing is separately attempting to offload its drone business Insitu.

Boeing, which acquired Jeppesen for $1.5 billion in 2000, had aimed for a price above $6 billion when it launched the auction last year, but strong interest from potential buyers drove the valuation higher.

Englewood, Colorado-based Jeppesen is seen as a sought-after asset that could boost aerospace contractors and private equity firms, which typically like to buy businesses to generate steady cash flow. Jeppesen is expected to benefit in the near term from technological advances in air travel and the future growth of aircraft production, analysts said.

About 3,900 employees work in Boeing's Digital Aviation Solutions. The transaction is expected to close by the end of 2025.

Boeing is set to report its first-quarter results on Wednesday.

(Reporting by Nilutpal Timsina and Nathan Gomes, and Milana Vinn in New York; Additional reporting by Dan Catchpole and Mike Stone; Editing by Mrigank Dhaniwala and Arun Koyyur)