Financially troubled Raytheon is selling a majority interest in its aircraft logistics support business to US investment firm Veritas Capital for $270 million, including $153 million cash.
Raytheon Aerospace, a subsidiary of the company's Raytheon Aircraft manufacturing unit (itself for sale), manages the maintenance and support of more than 1,600 aircraft worldwide, mainly for the US military. It provides contractor logistic support for USAir Force and navy trainer and transport fleets, with sales of around $500 million last year.
Raytheon will sell 70% of the unit to New York-based Veritas, an investment fund which owns threat-simulation specialists Sierra Research and Zeta, and test and training equipment suppliers PEI and Metric Systems. Veritas acquired defence supplier Tech-Sym last year for $182 million and recently agreed to buy bankrupt Stellex Aerostructures.
Analysts are puzzled by Raytheon's move, as the Aerospace unit has a backlog of $3.2 billion, but point to the company's financial difficulties. Raytheon has warned it will take a first quarter charge of $275 to $325 million to cover the cost of completing two projects at the former Raytheon Engineers & Constructors unit, which was sold last year. Selling Raytheon Aerospace is a quick way to raise cash, but may also make it easier to find a buyer for Raytheon Aircraft.
Source: Flight International
