Textron closing $1.4 billion purchase of Beechcraft Corp

5Right_5Left

Well-Known Member
Beechcraft Corporation, the Kansas-based aircraft maker, is closing in on a $1.4bn sale to the owner of Cessna in a deal that will secure the future of the company which emerged from bankruptcy just nine months ago.

Textron, which also builds Bell helicopters, may announce the deal to buy Beechcraft as early as Friday, according to people familiar with the matter. Textron’s shares closed up 14.5 per cent at a five-year high of $37.29, valuing it at $10.48bn

Beechcraft hired Credit Suisse in October to sound out potential buyers, according to people familiar with the process. The company is shifting away from its money-losing jet aircraft business and focusing instead on the less competitive propeller-powered aircraft market.

Other interested parties were rumoured to include Brazil’s Embraer and Indian group Mahindra & Mahindra.

The company – formerly known as Hawker Beechcraft and owned by a consortium of Goldman Sachs and Onyx – sought bankruptcy protection in May 2012 after suffering from declining orders for its Hawker business jets.

An $1.8bn deal in mid-2012 to sell it to Superior Aviation Beijing, a group about which little was known, broke down months later when the buyer failed to secure financing. SAB lobbied strenuously, but ultimately unsuccessfully, for the return of its $50m deposit.

It emerged from Chapter 11 in February this year after closing down the Hawker business.

The company told the Financial Times in August that it was basing its future plans on strong demand from the natural resources industry for its robust aircraft, which are capable of landing in conditions where jets would be unable to touch down.

Also in August, the company announced an order from Wheels Up, an aircraft ownership club, for 104 of its King Air turboprops – a deal that Beechcraft valued at $1.4bn.

For Textron, Beechcraft will further extend the range of aircraft it can offer customers. Cessna already offers a wider range of aircraft than any other maker of general aviation aircraft and the Beechcraft purchase will further strengthen its offering at the smaller, propeller-powered end of its range.

Cessna believes that aircraft buyers tend to be loyal to a particular brand and will stick with it as they gradually buy larger aircraft.

Centerbridge Partners, Sankaty Advisors and Angelo Gordon own about 90 per cent of Beechcraft.

None of the parties involved would discuss the process.



http://www.ft.com/intl/cms/s/0/59b141b0-69a5-11e3-aba3-00144feabdc0.html
 
They have been looking at Beech for sometime after the China deal fell through. I mentioned this last weekend in another thread about China. It will be interesting to see what sort of mission statement that Donnelly makes after the holidays. (I'd be surprised to see anything before then-but I will be watching Monday ) I imagine it's the turbine line that he sees a future in.Who knows at this point, it's a guess. I am sincerely hoping this will be something positive for Beech.
 
Let's also hope it's good news for the Air Capital of the World, Wichita KS.

Maybe Textron wants some of my Stearman stock?
 
They have been looking at Beech for sometime after the China deal fell through. I mentioned this last weekend in another thread about China. It will be interesting to see what sort of mission statement that Donnelly makes after the holidays. (I'd be surprised to see anything before then-but I will be watching Monday ) I imagine it's the turbine line that he sees a future in.Who knows at this point, it's a guess. I am sincerely hoping this will be something positive for Beech.
No way! He wants the turbo-prop line, as in Texan II and KingAir, as in government contracts.....
 
No way! He wants the turbo-prop line, as in Texan II and KingAir, as in government contracts.....
The military aspect of the KAs is of course a known value and so is the entire KA line in the civilian sector and probably their most valuable asset. I did not mean to seem like I underplayed that, it 's just the obvious benefit for them. What will be another benefit, will be future merged research and development capabilities and with Bell, perhaps expanded defense business which is something they have been trying to do. I am wondering, with this acquisition what changes in the long standing Beech mentality, will take place. The heads at Textron are damned experienced (not to say that they haven't had their own issues, because they have). This is a smart move for them though, for several reasons with a known and trusted brand. But it remains to be seen what re-branding may take place, also. It may be a while before all the details emerge.
 
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This could be dammed awesome - maybe there will be an American single-engine pilatus competitor with the speed of a beech, but the utility of a caravan.
Kinda like this?

Beech_KingAir_Single_Web.jpg
 
Saw the "Wheels UP" group KA at one of their MX facilities. I was curious if they were pushing a deal or just getting work.
 
The military aspect of the KAs is of course a known value and so is the entire KA line in the civilian sector and probably their most valuable asset. I did not mean to seem like I underplayed that, it 's just the obvious benefit for them. What will be another benefit, will be future merged research and development capabilities and with Bell, perhaps expanded defense business which is something they have been trying to do. I am wondering, with this acquisition what changes in the long standing Beech mentality, will take place. The heads at Textron are damned experienced (not to say that they haven't had their own issues, because they have). This is a smart move for them though, for several reasons with a known and trusted brand. But it remains to be seen what re-branding may take place, also. It may be a while before all the details emerge.
I'm tracking with you. I think they will abosolutely kill all the Beechjet and Hawker stuff; there is nothing that these lines offer that aren't already in the Citation group. The turbo-prop line is the key. I know Cessna is developing two different turboprops right now so I wonder how these will merge into this aquisition.
I do fear that the same leadership at Cessna will be an issue; the current CEO/President has some serious issues in running this type of business. Donnelly put him there because they are friends but that's truly a crap reason to mess up a good company (IMHO).

Who knows? Maybe they will just be happy with the Beech facilities and move Bell to Kansas! They are consolidating their facilites in TX.
 
I'm tracking with you. I think they will abosolutely kill all the Beechjet and Hawker stuff; there is nothing that these lines offer that aren't already in the Citation group. The turbo-prop line is the key. I know Cessna is developing two different turboprops right now so I wonder how these will merge into this aquisition.
I do fear that the same leadership at Cessna will be an issue; the current CEO/President has some serious issues in running this type of business. Donnelly put him there because they are friends but that's truly a crap reason to mess up a good company (IMHO).

Who knows? Maybe they will just be happy with the Beech facilities and move Bell to Kansas! They are consolidating their facilites in TX.
Because of the overlapping of similar types for the Premier/Hawker/Citation something may go, even though I kinda hate to see that really. But, things are not all ice cream and roses for Cessna either though. What will happen with Bonanza and Baron? Last year they started touting diesel variants for both of them.

You gotta love this conversion though.....

file.php


Was talking to the manager yesterday at West Coast and the comment was made, you think your parts are costing you a small fortune now, just wait. I really didn't need to hear that.
 
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This report from the end of October is of interest:

Plane deliveries
How Wichita’s general aviation plane makers fared through the first three quarters

Units shipped

20122013% difference
Beech (piston, turboprop only) 75 133 77.3%
Cessna 372 290 -22.0%
Learjet 20 9 -55.0%
Source: General Aviation Manufacturers Association



It’s been a tough year for some Wichita’s plane makers so far, according to third-quarter production figures released Thursday by the General Aviation Manufacturers Association.

Both Cessna and Learjet deliveries were down by double digits.

The good news is that Beechcraft Corp., which shed jet production during bankrutpcy proceedings this year to focus on its piston and turboprop products, is seeing strong gains.

Beechcraft reported the most deliveries for its piston and turboprop lineup over the first three quarters of this year since 2008. Those deliveries were up 77 percent compared to the first nine months of 2012.

The biggest reason for increased demand, said Shawn Vick, Beechcraft’s executive vice president of sales and marketing, is demand from businesses.

The company’s Bonanza and Baron piston aircraft as well as a good portion of its King Air tuboprop line are in demand as companies around the world invest in capital equipment, even as lighter aircraft aimed more at the personal flying market and the much more expensive small-jet markets remain down.

Vick said Beechcraft has already exceeded this year’s sales targets and expects to exceed its delivery targets. And its executives see that momentum increasing in the fourth quarter and into the coming year.

“The business is already creating backlogs for 2014, and we see a fair amount of activity in the sales pipeline, so we believe that we will go into 2014 with a lot of momentum,” Vick said.

Because of the sharp increase in piston and turboprop sales, the value of the Beechcraft’s deliveries is down only 2.9 percent year over year, despite the loss of jet sales in 2013.

But Cessna and Learjet are having tougher years.

Cessna’s overall deliveries by unit are down 22 percent and its billings are down 26 percent through the third quarter, according to the GAMA data.

Bombardier’s Learjet deliveries are down 55 percent. GAMA’s billings aren’t broken out by model, so billing numbers also include Bombardier’s Canadian-built jets.

But Jens Hennig, vice president of operations at GAMA, said that there was a sense of optimism at the recent National Business Aviation Association convention.

The issue for light jets, he said, is that they are sold almost solely in the United States, Canada and western Europe, so the potential market is smaller than for other planes.

And those regions have been plagued with uncertain business climates. But the economic background appears to be settling somewhat for the upcoming year.

“They want to buy, but they have not been willing to sign on the dotted line,” he said.

He said both Cessna and Bombardier have models that will be upgraded or replaced next year or in 2015, which is essential to sparking interest from buyers.

Overall, according to the GAMA report, the number of general aircraft for all companies delivered through the third quarter was up 6.6 percent to 1,513 total aircraft, and billings were up 24.4 percent to $15.4 billion.
 
Because of the overlapping of similar types for the Premier/Hawker/Citation something may go, even though I kinda hate to see that really. But, things are not all ice cream and roses for Cessna either though. What will happen with Bonanza and Baron? Last year they started touting diesel variants for both of them.
.

It was my understanding that the Hawker line was already dead.
 
It was my understanding that the Hawker line was already dead.
They put the Hawker division up for sale when they went into bankruptcy this past Spring, but then their deal with the Chinese fell through. The debt for the Hawker side was enormous also. The line could be started again. Is that likely? Probably not, but at this point, who knows yet.
 
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