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Raytheon Agrees to Sell Raytheon Aircraft Company to GS Capital Partners and Onex Partners

Raytheon Co. announced that it has signed a definitive agreement to sell Raytheon Aircraft Company (RAC) to Hawker Beechcraft Corporation.


September 19, 2007
By Carey Fredericks

WALTHAM, Mass., (December 21, 2006) Raytheon Co. (NYSE: RTN) announced today that it has signed a definitive agreement to sell its wholly-owned subsidiary Raytheon Aircraft Company (RAC) to Hawker Beechcraft Corporation, a new company formed by GS Capital Partners, an affiliate of Goldman Sachs, and Onex Partners. The company also announced that, subject to the closing of this transaction, its board of directors has approved further debt reduction and an increase in the company's stock repurchase authorization.

The company will sell RAC for approximately $3.3 billion and expects net after-tax proceeds to be approximately $2.5 billion.

The transaction includes Raytheon Aircraft facilities and other assets in Wichita and Salina, Kansas; Little Rock, Arkansas; Dallas, Texas; as well as its fixed based operations (FBO) network across the United States, United Kingdom and Mexico. The sale, which is subject to customary conditions and regulatory approvals, is expected to close in the first half of 2007.

Raytheon announced in July 2006 that it was reviewing strategic alternatives for Raytheon Aircraft Company, a world leading manufacturer of business and specialmission aircraft, providing a wide variety of aviation products and services for businesses, governments and individuals. RAC has more than 8,500 employees and has approximately 100 authorized service centers worldwide.

Subject to the closing of this transaction, the Raytheon board of directors has authorized the repurchase of up to an additional $750 million of the company's outstanding common stock, commencing in 2007. Also, subject to the closing of the RAC sale, the board of directors has authorized the early retirement of approximately $1.0 billion of the company's outstanding debentures. This is in addition to the $685 million of scheduled debt maturities in 2007.

Raytheon will now report RAC as a discontinued operation, and has updated the company's 2006 financial outlook. The company has also updated its 2007 outlook to reflect the anticipated closing of this transaction, which is expected during the first half of 2007.

The transaction does not include Raytheon's ownership in either Flight Options, LLC or Raytheon Airline Aviation Services LLC, both of which are reported in the "Other" segment of the company's financial statements.