Spirit AeroSystems

Background

Prior to being acquired by Onex in 2005, Spirit AeroSystems, Inc. (“Spirit”) was the captive aerostructures division of The Boeing Company, with its primary facility based in Wichita, Kansas, and with Boeing as its sole customer. At the time of Onex’ final exit in 2014, Spirit had become the largest independent Tier 1 aerostructures manufacturer in the commercial aircraft industry, with facilities in North America, Europe and Asia. The company’s core products included fuselage structures, propulsion systems (engine nacelles and pylons) and wing systems. Spirit manufactured aerostructures for every Boeing and Airbus commercial aircraft in production, as well as for other leading commercial and general aviation OEMs. Spirit also manufactured spare parts and military equipment, fabricated tooling, and provided limited design engineering and repair services.

Active Ownership

Onex worked closely with management on the following initiatives:

  • Negotiated favourable long-term labour agreements with the five labour unions that were brought over to Spirit, significantly improving manufacturing efficiencies and resulting in a more flexible, lower cost work force. In return for salary, benefits and work-rule concessions, 4,850 employees accepted Spirit stock appreciation rights that produced remarkable returns upon the company’s IPO;
  • Negotiated favourable long-term commercial supply contracts for in-production aircraft and secured new contract wins with Boeing;
  • Established a strong board of directors and built-out the senior executive team by adding key finance, sales, HR, legal, IT and marketing executives;
  • Oversaw the separation of Spirit from Boeing, including the implementation of new enterprise software and the establishment of appropriate accounting policies, cash management and control procedures;
  • Sourced and led Spirit’s $146 million acquisition of British Aerospace’s aerostructures unit, a significant Airbus supplier based in Scotland, providing Spirit with geographic and customer diversification; and
  • Led the IPO of Spirit in 2006 as well as several refinancings.

Investment Results

Onex facilitated Spirit’s initial public offering in November 2006 and subsequently executed numerous secondary share sales, with the final remaining stake sold in August 2014. The $375 million investment from the Onex Partners I Group generated $3.2 billion of total value, resulting in an 8.5 times gross multiple of capital invested and 200.9% gross IRR.