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Beechcraft drawing interest from Embraer, Mahindra

Oct. 28, 2013, Wichita, Kan. - Beechcraft Corp., the U.S. planemaker that exited bankruptcy protection in February, has drawn takeover interest from at least three suitors, including Brazil’s Embraer SA and India’s Mahindra & Mahindra Ltd., said people familiar with the matter.


October 28, 2013
By Bloomberg

Cessna parent Textron Inc. also is looking, said the
people, who asked not to be named since the process is private.
First-round bids are in and Beechcraft’s management team is
scheduling talks with potential bidders, one of the people said.
It isn’t clear which companies submitted offers.

 

Beechcraft is reviving the auction process a year after its
deal to sell itself to a Chinese jetmaker collapsed. The sale
may fetch about $1.5 billion, a person with knowledge of the
process said last week. Buying the company would provide either
Mahindra or Embraer with an easy way to expand in the North
American aerospace industry, said Richard Aboulafia, an analyst
at the Teal Group in Fairfax, Virginia.

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Going with Mahindra’s “own indigenous development program,
which is what they’ve been looking at, has a much higher risk
than acquiring Beechcraft,” Aboulafia said in an interview.
“If you can get a good deal on an existing family of planes,
that’s definitely an easier way.”

 

Centerbridge Partners LP, Sankaty Advisors LLC and Angelo
Gordon & Co. are among the firms that own about 90 percent of
Wichita, Kansas-based Beechcraft. Credit Suisse Group AG was
contacting suitors about conducting due diligence on Beechcraft
as of last week, people with knowledge of the matter said then.

Mahindra Interest

Representatives for Beechcraft, Embraer, Textron, Credit
Suisse and Mahindra declined to comment.

 

Mahindra expressed interest when Beechcraft was in
bankruptcy last year, one of the people said. While it looked
again more recently, Beechcraft’s price expectations may deter
the Indian industrial conglomerate, according to that person.

 

The planemaker is in the process of closing down a money-losing jet
aircraft business and is focusing on its propeller-drive aircraft line.
In August, Beechcraft announced a $1.4
billion contract to sell and service its King Air planes for
private aviation firm Wheels Up. The deal was the largest
propeller-aviation transaction in history, the company said in a
statement.

 

Slumping demand for private jets and curbs on U.S. defense
spending led the company, formerly known as Hawker Beechcraft,
to file for bankruptcy in May 2012. Negotiations to sell it for
$1.79 billion to Superior Aviation Beijing Co. collapsed months
later. Since emerging from bankruptcy, Beechcraft has said it’s
selling Hawker assets to focus on propeller-driven and military
planes.