Textron to Buy Beechcraft Corp. for About $1.4 Billion in Cash

Dec 26, 2013 8:00 pm ET

Dec. 26 (Bloomberg) -- Textron Inc., the manufacturer of Cessna aircraft and Bell helicopters, agreed to buy planemaker Beechcraft Corp. for about $1.4 billion in cash and debt.

Textron will purchase all outstanding equity interests in Beech Holdings LLC, the parent of Beechcraft, and will finance the purchase of the equity as well as cash required for the repayment of Beechcraft’s working capital debt through a combination of cash and up to $1.1 billion in new debt, Providence, Rhode Island-based Textron said in a statement.

Adding Beechcraft would expand Cessna’s lineup of piston- engine and turboprop planes, a less-competitive field than private jets. Formerly known as Hawker Beechcraft, the company left bankruptcy protection in February and stopped making business jets to focus on propeller-driven models such as military trainers and the twin-engine King Air.

“This creates a broader selection of aircraft and a larger service footprint -- all sharing the same high standards of quality and innovation,” Textron Chairman and CEO Scott C. Donnelly said in the statement.

Beechcraft had revived an auction process a year after its deal to sell itself to a Chinese jetmaker collapsed. It had drawn takeover interest from at least three suitors, including Brazil’s Embraer SA and India’s Mahindra & Mahindra Ltd. and Textron, Bloomberg News reported in October, citing people familiar with the matter.

Investors holding enough equity in Beech Holdings to approve the transaction have delivered proxies authorizing written consents in favor of the transaction, Textron said. The transaction is expected to close during the first half of next year, subject to customary closing conditions, including regulatory approvals, according to the statement.

JPMorgan & Chase & Co. served as exclusive financial adviser to Textron and is providing committed financing in connection with the acquisition. Beech Holdings was advised by Credit Suisse AG and Morgan Stanley.

--Editors: Anand Krishnamoorthy, Ben Livesey