GS Capital, Onex in $3.3bn Raytheon spinout

The two private equity firms will acquire Raytheon Aircraft, which makes small planes and midsized corporate jets.

Goldman Sachs Capital Partners, the New York-based private equity arm of global investment giant Goldman Sachs, and Onex Partners, a publicly traded private equity fund based in Toronto, Canada, have agreed to buy Raytheon Aircraft Company, manufacturer of business and special-mission aircraft, from its parent company, Waltham, Massachusetts-based Raytheon Company, for approximately $3.3 billion (€2.5 billion), Raytheon Company said in a statement.

Raytheon Aircraft: acquired by GS Capital and Onex

The deal is expected to close in the first half of next year. To make the acquisition, Onex and GS Capital formed the vehicle Hawker Beechcraft Corporation, said a source close to the deal.

The deal includes the sale of Raytheon Aircraft production sites in Wichita, Kansas; Salina, Kansas; Little Rock, Arkansas; and Dallas, Texas, the statement said. It also includes the sale of the fixed based operations network that spans the US, UK and Mexico.

Jim Schuster is Raytheon’s chief executive officer. “The buyers have indicated that management will remain in place,” said the source close to the deal.

Led by chairman and chief executive officer William Swanson, Raytheon Company specialises in the defense and government electronics, space, information technology, and technical services sectors, the statement said. It has more than 80,000 employees in 18 countries worldwide, according to information on the company’s website. It also has customers in more than 70 countries, including those in Asia, Europe and the Middle East, the website said.

Onex Partners specialises in the service, manufacturing and technology industries, the statement said. It is publicly traded on the Toronto Stock Exchange under the ticker symbol “OCX”. Its second private equity fund, Onex Partners II, closed at $3.45 billion in August. Of the fund’s commitments, $1.45 billion, which is 41 percent of the capital, came in from Onex Partners itself, and the remaining $2 billion was from an undisclosed group of global institutional investors. At the time of the fund’s close, Onex expected to acquire Chicago-based Aon Warranty Group, an extended-warranty contract provider, for approximately $710 million before the end of the year.

Goldman Sachs Capital Partners, founded in 1991, includes 12 investment vehicles valued at approximately $35 billion of capital. The group joined CCMP Capital Advisors, JPMorgan Partners, Thomas H. Lee Partners and Warburg Pincus, as well as Aramark chairman Joseph Neubauer, to take Aramark, a Philadelphia, Pennsylvania-based cafeteria operator, private for approximately $8.3 billion.