August 7, 2014

Onex offers rest of Spirit stock up for sale

Onex Corp., Spirit AeroSystems’ largest stockholder, will offer its remaining shares of Spirit stock for sale.

Onex Corp., Spirit AeroSystems’ largest shareholder, is divesting itself of all its shares of Spirit AeroSystems stock, Spirit said Thursday afternoon.

Spirit intends to hold a public offering of 8.56 million shares of Class A common stock, the company said in a statement.

The stock is held by the Canadian investment firm Onex Corp., its affiliates and current and former members of management, it said.

“Following completion of the offering, Onex will no longer own any shares of the Company,” Spirit said.

Morgan Stanley and Barclays are acting as underwriters for the offering.

Onex Corp. bought Boeing’s Wichita commercial aviation division in 2005 and formed Spirit AeroSystems.

Spirit became a publicly traded company in 2006.

The company reported strong second quarter earnings last week, its second quarter of healthy earnings this year. The results followed a series of missteps, hefty charges on developmental programs and losses.

“That’s a fascinating thing,” Wayne Plucker, an aerospace and defense analyst with Frost & Sullivan said of the news. “When they were first spun off by Boeing, it looked a little dicey as far as contracts and that kind of thing. But all in all they’ve done a good job of going out and getting contracts with a lot of other folks. Maybe it’s reached the point where Onex thinks it can get its money back with a nice additive balance.”

Onex has held Spirit stock for eight years.

“I’m not so sure they intended to stay in as long as they did,” said Teal Group analyst Richard Aboulafia. “They’re less about long-term holding any particular industry and more about initial investments and doing deals. They get paid for doing deals and not for long-term shareholding.”

Onex’s action is not a negative vote about Spirit’s future, Aboulafia said.

“This is simply the way they do business,” he said. “They make deals happen, and they move on to another deal.”

Onex and its managers have been divesting Spirit stock throughout the year.

In June, Onex and current and former managers offered 8.17 million shares of Class A common stock through a public secondary offering held by Spirit.

At the completion of that offering, Onex relinquished voting control of the company.

In March, Onex offered 6.2 million shares of Spirit Class A stock in the same fashion.

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com. Follow her on Twitter: @mmcmillin.

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