updated 12/21/2006 11:25:45 AM ET 2006-12-21T16:25:45

Defense contractor Raytheon Co. plans to sell its aircraft business for $3.3 billion to Hawker Beechcraft Corp., a new company formed by an affiliate of Goldman Sachs and Onex Partners.

The world’s fifth-largest defense contractor said Thursday it expects to pocket $2.5 billion after taxes from the sale of the Wichita, Kan.-based unit that makes Hawker and Beechcraft planes for commercial and military markets. The business has more than 8,500 employees and about 100 centers worldwide.

The deal includes facilities and other assets in Little Rock, Ark., Dallas and two sites in Kansas, Raytheon said.

The aircraft division to be sold makes Beechcraft single-engine, two- and four-seat planes and Hawker mid-size, twin-engine corporate jets. The planes compete with foreign companies including Canada-based Bombardier Aerospace and Brazil-based Embraer.

The sale of Raytheon Aircraft is part of the company’s strategy to focus on its core government and defense business, Raytheon Chairman and CEO William H. Swanson said.

The purchasing company was formed by GS Capital Partners, an affiliate of Wall Street investment bank Goldman Sachs Group Inc. and Toronto-based private-equity firm Onex Partners LP.

Subject to regulatory approval, the company expects the transaction to close in the first half of 2007. Once that happens, the company plans to buy back an added $750 million in shares in 2007, and retire about $1 billion in debt.

Raytheon will begin reporting the aircraft business as a discontinued operation. As a result, the company lowered its guidance for 2006 and 2007.

Raytheon now expects 2006 earnings per share from continuing operations of $2.35 to $2.45, down from $2.70 to $2.80, on sales of $20 billion to $20.5 billion, down from $23.1 billion to $23.6 billion.

For 2007, Raytheon now forecasts earnings per share from continuing operations of $2.75 to $2.90, down from $2.95 to $3.05, on sales of $21.3 billion to $21.8 billion, down from $24.6 billion to $25.1 billion.

Analysts surveyed by Thomson Financial were expecting earnings per share of $2.81 on revenue of $23.32 billion for 2006, and $3.12 on revenue of $24.58 billion for 2007.

In October, Raytheon announced a $16.3 million expansion plan for the aircraft finishing plant at Little Rock National Airport. The facility employs 645 people.

The expansion will allow the plant to do all the finishing work on Raytheon’s Hawker 4000, a twin-engine business jet. The plant already does some work on the Hawker 4000.

The new finishing work will create 150 full-time jobs.

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