Shearman, Kirkland Help Land $1.4 Billion Beechcraft Sale
Less than a year after emerging from bankruptcy, Wichita, Kan.–based aircraft manufacturer Beechcraft has agreed to be acquired by Cessna Aircraft Company parent Textron in an all-cash deal worth $1.4 billion.
Formerly known as Hawker Beechcraft, the target company—which has produced a variety of civilian and military aircrafts since its founding 81 years ago—filed for Chapter 11 protection in May 2012 amid mounting debts tied to a sharp decline in sales of its now-defunct Hawker line of private business jets.
Beechcraft exited bankruptcy in February after shedding roughly $2.5 billion in debt by transferring to its major creditors ownership stakes previously held by investors Onex Corporation and Goldman Sachs. Since then, the company has dropped the "Hawker" from its name and focused on offerings such as its King Air turboprop plane and military trainer models.
The company's new owner is Providence, R.I.–based Textron, a conglomerate whose holdings span the aviation, defense and industrial sectors. Among Textron's subsidiaries: Wichita-based Cessna, which makes a range of single-engine aircrafts as well as the Citation line of business jets.
In announcing the deal Thursday, Textron noted that Beechcraft is expected to generate $1.8 billion in revenue this year. Textron CEO Scott Donnelly said the acquisition would expand his company's product line and aftermarket-servicing network.
The deal is expected to close in the first half of 2014, pending regulatory approval.
Shearman & Sterling is advising Textron on the transaction with a team that includes New York–based M&A partners Peter Lyons and Robert Katz. Restructuring partner Douglas Bartner, tax partner Michael Shulman, compensation and benefits partner John Cannon, IP transactions partner Samuel Waxman, litigation partner Alan Goudiss and antitrust partners Dale Collins and Stephen Mavroghenis are also advising, along with M&A counsel Sean Skiffington, restructuring counsel Jill Frizzley, antitrust counsel Lisl Dunlop and environmental counsel Jason Pratt. The Shearman associates working on the matter are Sara Ashall, Benjamin Brod, Zhak Cohen, Kelly Karapetyan, Derek Kershaw, Karina Lubell and Gary Tashjian. E. Robert Lupone is Textron's general counsel.
Shearman advised Textron and Cessna last year on a series of aircraft assembly joint ventures launched by the latter and China Aviation Industry General Aircraft Company.
Kirkland & Ellis, meanwhile, is representing Beechcraft on the deal after serving as the company's legal adviser throughout the bankruptcy process. The Kirkland team working on the Chapter 11 case included restructuring partners James Sprayregen, Paul Basta, Patrick Nash Jr. and Ross Kwasteniet. In Aperil, a federal bankruptcy court judge approved the payment of roughly $6.5 million in legal fees and expenses to Kirkland in connection with the firm's work on the Chapter 11 proceedings, according to court filings [PDF]. Kirkland also represented Beechcraft on its attempted sale out of bankruptcy to Chinese company Superior Aviation Beijing in a proposed $1.79 billion deal that collapsed in October 2012 as a result of regulatory concerns.
The Kirkland attorneys advising Beechcraft on the company's sale to Textron include New York–based corporate partners Sarkis Jebejian, David Feirstein and David Fox, as well as associate Laura Sullivan. Beechcraft's general counsel is Alexander Snyder.