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Boeing has agreed to sell parts of its digital aviation unit to private equity group Thoma Bravo for $10.55bn as the US group seeks to bolster its financial position.
Virginia-based Boeing on Tuesday said it had agreed to sell its digital aviation solutions business — including its Jeppesen assets, which provide navigation products and software, and ForeFlight, an aviation navigation app — to Thoma Bravo in an all-cash transaction.
The planned disposal is part of an effort by Kelly Ortberg, who took over as Boeing’s chief executive in August, to streamline the heavily indebted aerospace and defence group, which has struggled to recover after safety scandals in recent years.
Ortberg said: The transaction is an “important component of our strategy to focus on core businesses, supplement the balance sheet and prioritise the investment grade credit rating”.
For Thoma Bravo, a specialist technology investor with $179bn in assets, the deal represents a large bet in a new industry, suggesting a belief that the unit possesses predictable revenues, similar to software licences.
The private equity group will finance its deal with more than $6bn of equity and about $4bn in a private loan led by Apollo Global Management, said people briefed on the matter.
The Apollo loan is its largest as part of a $25bn lending partnership it has struck with Citigroup.
Citi can use this arrangement to offer its large corporate clients, such as Boeing, private lending options funded by Apollo. For Thoma Bravo, that financing option proved appealing as it raced to win a fierce bidding war that included many large buyout groups including Advent International, TPG, Veritas Capital and Francisco Partners, the people said.
Apollo and Citi will lead a broader club of lenders, including rivals Blackstone, Ares and KKR, in what is one of the largest private loans. Thoma Bravo and Apollo declined to comment.
Boeing shares were trading up 0.33 per cent at $159.87 in Tuesday afternoon trading in New York.
Boeing said it would keep its core digital capabilities that supply the aircraft and fleet-specific data the group uses to provide maintenance, diagnostics and repair services to its defence and commercial aircraft customers. The division employs about 3,900 people globally, including the elements of the business that will remain with Boeing.
The agreement marks the biggest strategic move by Ortberg who took over from Dave Calhoun last August following the mid-air blowout of a door panel on an Alaska Airlines 737 Max aircraft in January.
Ortberg last October spearhead a $24bn sale of new stock — a record for a US company — and agreed a $10bn credit facility to shore up Boeing’s strained balance sheet as it endured a labour strike that curtailed plane deliveries. The company, which has $54bn in consolidated debt, slumped to its second-biggest annual loss on record owing to a tough 2024.
Boeing, which reports its first-quarter earnings on Wednesday, has not issued guidance for the year.
The group aims to build more than 38 of its best-selling 737 jets a month later in the year, if it receives approval from the US Federal Aviation Administration. Regulators capped production at that level after the Alaska Airlines incident exposed deficiencies in Boeing’s manufacturing process.
The transaction with Thoma Bravo is expected to close by the end of 2025.
