Opinion: Bad parents – Hawker Beechcraft is a bad advert for private equity
For people who focus on the bottom line, private equity firms spend a lot of time worrying about their industry’s image. Their trade bodies argue that private equity delivers the capital to help industry grow and they have a point.
Onex and Goldman Sachs Capital Partners acquisition of Hawker Beechcraft, however, is an example of what happens when private equity firms get things very wrong. Neither of them comes out of the transaction with any credit. The overpaid and overleveraged. That happens. But they then failed to react to the downturn.
Hawker Beechcraft’s management team has worked hard – in fact, you could probably criticise them for trying to do too much at one time – and has presented its shareholders with various options during the last few years. But Goldman and Onex appear to have bet everything on the upturn coming. Hope is not a strategy.
The last few years have been very tough for Hawker Beechcraft’s staff and the last few weeks have been very unsettling. But at least they may soon lose Onex and Goldman Sachs as owners.