Onex Corp. Believed To Be Strongest Candidate For Buyout

It appears Raytheon may be one step closer to selling off its aircraft operation. The Wichita Eagle says sources close to the deal report Raytheon Aircraft has entered exclusive talks with Onex Corp. and Goldman Sachs.

Onex is one of three leveraged buyout firms believed to be final bidders for the company. As Aero-News reported last month, the others are the Carlyle Group, and Cerberus Capital Management.

Of those three, Onex is considered the strongest bidder -- based, in part, on its 2005 acquisition of Boeing's commercial aircraft supply operation. The unit, now known as Spirit AeroSystems Holdings Inc, builds commercial aircraft components for new manufacture and replacement parts.

Exclusive talks are usually a sign "both parties would like to see this deal take place," said William Alderman, president and founder of the private investment bank Alderman & Co. The Eagle states Alderman was not commenting specifically on Raytheon Aircraft.

Raytheon announced in July it was considering the sale of its Beechcraft and Hawker aircraft lines. Both operations are based in Wichita, KS.  Raytheon would retain ownership of its Flight Options fractional ownership business, as well as charter operator Raytheon Airline Aviation Services.

Alderman says two things would likely happen if -- and when -- Raytheon Aircraft is sold. One would be an investment in a new aircraft line, possibly a VLJ. The second likelihood would be greater dependance on outsourced labor, both domestically and internationally.

Sources say the pricetag for Raytheon Aircraft Services is around $3 billion.

Beechcraft became a subsidiary of Raytheon in February 1980. Thirteen years later, Raytheon Corporate Jets acquired the Hawker line from British Aerospace. Beech Aircraft and RCJ merged to form Raytheon Aircraft in September 1994.

FMI: www.raytheonaircraft.com/, www.onex.com