Background: Onex and Goldman Sachs buy Hawker Beechcraft


A look back at Onex and GS Capital Partners' multi-billion dollar acquisition of Hawker Beechcraft.

“In one sense, nothing is going to change with new ownership,” said Sanjeev Mehra. “In another sense, a lot may change.”

For someone who had just helped close a multi-billion dollar deal to acquire of one of the world’s most iconic aircraft companies, the managing director at GS Capital Partners, response was a little cryptic.

Having headed the banking firm’s Principal Investment Area for the previous 11 years, and having sat on boards ranging from Burger King to Nalco, the $3.3 billion acquisition of Raytheon Aircraft Company was one of Mehra’s bolder moves.

For Nigel Wright, MD of Onex Partners, it was more of a personal triumph. “My Dad was a recreational pilot who spent his weekends at the airfield,” said the Canadian, with the ink on the contract barely given the time to dry. “I remember being with him as a 6-year-old, and there was a Beechcraft Baron based there. He always said it was a great airplane to fly.”

The rich history of the Hawker Beechcraft Corporation started in 1932. Founded by Walter H. and Olive Ann Beech, Beech Aircraft Corporation first introduced the world to Model 17, the classic Beechcraft Staggerwing; a fast and muscular  biplane, built with the business traveller in mind, but as equally popular with air racers.

It was not until 1980 that Beech became a subsidiary of Raytheon, an aerospace and defence company with its headquarters in Lexington, Massachusetts. Continuing to grow, the ambitious Raytheon acquired British Aerospace Corporate Jets in 1993, which came with the popular line of mid-sized Hawker jets. The following year, a merger then saw Beech Aircraft join with the renamed Raytheon Corporate Jets to form Raytheon Aircraft.

Business continued to boom for a decade and more, with the 5,000th King Air delivered in June 1996 and the 100th Raytheon Premier I delivered to Virginia in May 2004. In March 2007 Onex and New York’s GS Capital Partners – an affiliate of Goldman Sachs – become the new owners of Raytheon Aircraft, before renaming it as Hawker Beechcraft Corporation.

Commenting on the acquisition, Goldman Sach’s Sanjeev Mehra said: “Our philosophy is to agree to a business plan, which we have done, to align incentives and let management run the business with oversight of the board.”