A conversation with Hawker Beechcrat’s new owners
Tell me about your rstencounter with the Hawker orBeechcrat brand.
My dad was a recreational pilotwho spent his weekends at the aireld.I remember being with him as a 6-year-old, and there was a Beechcrat Baronbased there. He always said it was a greatairplane to fy.
My rst encounter with theHawker brand occurred when I servedon the board o NetJets. In addition,Goldman Sachs was a NetJets customer,so I was amiliar with the Hawker 1000and Hawker 800 – great airplanesand great or NetJets. Beore that, Ihad fown in the Beechcrat King Airnumerous times and was very impressed.
Let’s talk about businessstrengths. Nigel, what does HBC havegoing or it?
As investors, we are veryattracted by not just the breadth othe product line but how strong eachproduct is. For example, the King Air hasan incredible reputation in the industry.Also, the Hawker 4000 will be a completecommercial success as well as a technicalsuccess. We like the act that the productline provides a ladder or customers tomove up. The military T-6 trainer givesthe business stability, which providesgood balance as the tide o the generalaviation market ebbs and fows.
Sanjeev, what made this an idealcompany in which to invest?
We see a company withgreat brands, great products, greatmanagement and a market that isertile or growth both domesticallyand internationally, particularly in theemerging markets o India and Asia.
How do these strengths –coupled with new ownership – translateinto even better perormance inthe marketplace?
In one sense, nothing isgoing to change with new ownership. Inanother sense, a lot may change. We arenow no longer part o a big enterprise.This means we can all be ocusedon improving the general aviationbusiness and trainer business and not bedistracted by any other objectives.
This company has been termed“non-core” or the past ew years. Nowevery employee and customer knowsthat it is absolutely core to the business. Itis not on the periphery o anybody else’sbusiness. I think that is tremendouslyenergizing and a comorting act orthe employees.Onex Partners and GS Capital Partnershave a lot o capital and are preparedto invest in the business. We haveexperience with sales and marketingstrategies and have good relationshipsin the industry that we are prepared tobring to bear.
What do you want employees toknow about you?
We are enthusiastic or theindustry, and we have a successul recordo working with companies to build andgrow them. People have a view o privateequity that they show up and chopthings out and sell o pieces. GoldmanSachs and Onex are not choppers; webuild businesses into global leaders. Weare patient, helpul investors who arein it or the long haul. We partner withmanagement and employees to be thebest we can be.
While it is a big company,the metrics that drive uture growthare very simple. We are all aboutvalue creation and perormance. Ourphilosophy is to agree to a business plan,which we have done, to align incentivesand let management run the businesswith oversight o the board. We’re notgoing to be second-guessing or makingday-to-day decisions that are reallymanagement’s prerogative. But we willbe helping them with strategy, capitalstructure and our network o contacts sowe can help grow the business.
What should customers knowabout the new ownership?
One o the reasons we’veinvested in this company is because wesalute the progress that has been madein dramatically improving customerservice over the last ve years. Ourcommitment is not to cut corners onthings like quality and reliability. Wewant to continue to push urther untilHawker Beechcrat is unambiguouslyseen as an industry leader in customersupport and service. That is the magicingredient that sells airplanes over time,and we want to ensure we get betterand better at it.
How did they decide to buy the company, where will HBC be in fve years and more
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“We see a company with great brands,great products, great management anda market that is fertile for growth.”
Onex Partners and GS Capital Partners, an aliate o Goldman Sachs, aretwo o the most highly respected investment rms in the world. But who arethe people behind this new chapter in the history o what will now be knownas Hawker Beechcrat Corporation (HBC)?To provide readers a look at the company’s new owners, we talked with themanagement team who have led the acquisition o HBC – Nigel Wright andSanjeev Mehra.Nigel, a Canadian who currently lives in Toronto, is a managing director oOnex Partners. A graduate o Harvard Law School, he practiced law or sevenyears beore joining Onex in 1997. In 2005, Nigel helped lead Onex’ acquisitiono Boeing’s commercial airplane manuacturing operations, now operating asSpirit AeroSystems, Inc.Sanjeev is a managing director in the Principal Investment Area o GoldmanSachs & Co., one o the oldest and largest investment banking rms in theworld. Sanjeev, who holds a master’s in business administration rom HarvardBusiness School, joined the company in 1986 and became a managing directorin 1996.Based in New York City, he currently serves on numerous corporate boards,including the executive committee or Burger King Corporation, Nalco HoldingsInc., ARAMARK Corporation, SunGard Data Systems Inc., Madison RiverTelephone Company Inc., Adam Aircrat Industries and KAR Holdings Inc.In his 18 years as a private equity investor, Sanjeev has been involved in anumber o general aviation and aerospace investments on behal o GoldmanSachs, including Executive Jet Aviation (NetJets
), Hexcel Corporation andAdam Aircrat Industries Inc.
Sanjeev MehraNigel Wright
Beechcraft Baron G58 38Beechcraft Bonanza G36 80
Hawker 850 48Hawker 800XP 15Hawker 400XP 53Beechcraft Premier IA 23
Beechcraft King Air 350 43Beechcraft King Air B200 35Beechcraft King Air C90GT 51
Who will run HBC?
A board of directors will be the decision-making body on strategic matters and big capitalallocation matters, while the senior leadership team will run the business on a day-to-day basis.The board will include representatives from Onex and Goldman Sachs, as well as independentdirectors who provide a broader perspective and expertise. Jim Schuster, who remains as CEO,will be a board member.
– Sanjeev Mehra, Goldman Sachs