The Hunt For Raytheon Aircraft's Buyer

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Onex Corp. together with Goldman Sachs might have entered into exclusive negotiations for the acquisition of Raytheon Aircraft Company (RAC), according to a report published Thursday in The Wichita Eagle. The arrangement would allow the potential buyer access to company records providing information necessary to determine the exact position of Raytheon Aircraft as final details of the potential deal are reached. Though RAC recently added employees and announced plans to add more, a new owner would likely seek to cut operating costs (possibly by outsourcing) or launch a new product (such as a very light jet). Both options would reallocate human resources. While exclusive negotiations allow a prospective buyer more ready access to information critical to the decision making process, they also require more investment toward research. The risk to RAC is that, if after further investigation and investment a bidder withdraws from exclusive negotiations, the perceived value of the company to other potential bidders would likely drop, as would their bids.