PROVIDENCE, R.I. — Cessna’s parent company, Textron, has reached an agreement to purchase all outstanding equity interests in Beech Holdings, LLC, the parent of Beechcraft Corp., for approximately $1.4 billion in cash.
Beechcraft Corporation reported an $1.8 billion in revenues in 2013, following its emergence earlier this year from bankruptcy. With more than 36,000 aircraft in service, Beechcraft supports its base of Hawker business jets, King Air turboprops and Beechcraft airplanes with a global network of company-owned and authorized service centers.
“The acquisition of Beechcraft is a tremendous opportunity to extend our general aviation business,” said Textron Chairman and CEO Scott C. Donnelly. “From our customers’ perspective, this creates a broader selection of aircraft and a larger service footprint — all sharing the same high standards of quality and innovation. The iconic King Air product line perfectly complements our Caravan and Citation jet line-up and our combined global service network will deliver the superior level of services expected by our Cessna, Beechcraft and Hawker customers.”
“This transaction represents an important step forward in the evolution of Beechcraft’s business,” added Beechcraft CEO Bill Boisture. “The team at Beechcraft has worked tirelessly to strengthen our core business and to maintain our position as a leader in a highly competitive environment. Textron’s experience in the industry and its willingness to invest in and maintain the iconic Beechcraft brand make it an ideal parent company, one that will help us continue to satisfy our customers and meet our business objectives at a faster pace.”
Part of the deal includes Textron acquiring the Hawker 4000 and Premier IA type certificates. These jets were essentially abandoned when Beechcraft emerged from Chapter 11 bankruptcy in February 2013.
Maintenance services for the jets will continue through Beechcraft’s factory-owned service center network, Hawker Beechcraft Services, and Authorized Service Centers around the world with Hawker 4000 and Premier ratings, Beechcraft officials said.
Textron plans to finance the purchase of the equity, as well as cash required for the repayment of Beechcraft’s working capital debt, through a combination of available cash and up to $1.1 billion in new debt. Holders representing equity interests in Beech Holdings sufficient to approve the transaction have delivered proxies authorizing written consents in favor of the transaction. The transaction is expected to close during the first half of next year, subject to closing conditions, including regulatory approvals.
J.P. Morgan served as exclusive financial adviser to Textron and is providing committed financing in connection with the acquisition.