HIG buys Raytheon division, places $1bn plane order

The private equity firm is growing the fleet of Flight Options, the second Raytheon division to be picked up by a private equity firm this year.

US private equity firm HIG Capital has acquired Raytheon’s private luxury jet division, Flight Options, for an undisclosed amount.

Phenom 300

Concurrent with the acquisition’s close, Flight Options has placed an order for some $1 billion (€681 million) of Phenom 300 light-jets from Brazilian manufacturer Embraer, bringing the number of vehicles in its fleet to 300.

Flight Options, which leases and sells luxury aircraft, is the second Raytheon division to be picked up by private equity firms. In January, Goldman Sachs Capital Partners and Onex agreed to acquire Raytheon’s business and special-mission aircraft division $3.3 billion (€2.2 billion).

Led by chairman and chief executive officer William Swanson, Raytheon plans to focus on its core businesses of government and military contracts. The company has more than 80,000 employees in 18 countries worldwide and customers in more than 70 countries, including Asia, Europe and the Middle East.

Several private equity firms have turned their attention to the aircraft sector. Oak Hill Capital Partners has been active in the space since 2003, and has purchased 25 passenger aircraft which are leased to airlines around the world, as well as 19 freight aircraft. Earlier this month the firm acquired aerospace engine parts manufacturer Firth Rixson from The Carlyle Group and Lehman Brothers for $2 billion.

Aviation vet Stephen Rimmer raised a $278 million fund for aircraft acquisitions in 2005 in partnership with Guggenheim Capital. Guggenheim Aviation Partners closed its second fund on $737 million this October.