The First Concrete Details Emerge
In releases issued as most of America was still scarfing up leftover turkey and stuffing (with extra gravy), GA's remaining All-American powerhouse has officially commented on their purchase of Beech and let loose with just a few details as to what may thereafter transpire.
Textron Boss, and the architect of what may ultimately be the best hope the American GA biz has against being swallowed up whole by the Chinese, Scott C. Donnelly, notes that, “The acquisition of Beechcraft is a tremendous opportunity to extend our general aviation business. 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.”
An individual statement released by Beech states that, 'Since its emergence from Chapter 11 protection in February 2013, the market has responded positively to the new Beechcraft Corporation. The company's strong aircraft delivery numbers in the first three quarters of this year and the securing of its highest booking rates in the past three years are evidence of Beechcraft's renewed growth in the market.
Under the terms of the transaction, Textron will acquire the Hawker 4000 and Premier IA type certificates. Maintenance services for the aircraft 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 will continue to provide uninterrupted service and support for all Hawker 4000 and Premier aircraft.'
Beech's Bill Boisture, added that, "This transaction represents an important step forward in the evolution of Beechcraft's business. 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."
How Cessna and Lycoming, Textron's other GA jewels, may fare in all this -- in terms of organizational and mission structure -- has not yet been divulged but buzz is building for an eventual melding of the Cessna and beech assets and organization.
According to Textron/Beech statements, 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 was unanimously supported by Beechcraft's board of directors and is expected to close during the first half of 2014, subject to customary closing conditions including regulatory approvals.
The definitive agreement includes a customary no-shop provision with exceptions permitting Beech Holdings to respond to, evaluate and, under certain circumstances, accept an unsolicited proposal that is superior to the transaction with Textron, in which case a termination fee of $48 million will be payable by Beech Holdings to Textron. Credit Suisse acted as lead financial advisor to Beech Holdings on the transaction and Morgan Stanley also served as a financial advisor. Kirkland & Ellis LLP served as legal advisor to Beech Holdings on the transaction.
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