In the Works: Cirrus Vision SF50
With the announcement by Cirrus Aircraft president and CEO Brent Wouters that China’s Caiga plans to buy Cirrus (a U.S.-based group is organizing a counter-offer; see page XX), the delayed Vision SF50 single-engine jet program may see an infusion of money. The buyout proposed by China Aviation Industry General Aircraft, a unit of China’s Avic International, is to buy all of Cirrus from the several hundred shareholders who currently own the company, including Bahrain-based Arcapita, which owns 60 percent. Caiga is also buying Continental Motors, which provides the piston engines for Cirrus airplanes.
Details of Caiga’s offer have not been revealed, but in a recent development former aerospace executive Brian Foley is assembling investors to make a counter-offer that would keep Cirrus an American company. Foley believes that the price for Cirrus is in the $200 million range, although it is not known how much of that is debt.
If Caiga’s purchase of Cirrus goes through, the actual transaction should take place in the middle of this year following approvals by U.S. and Chinese government entities, including the U.S. Committee on Foreign Investment in the United States, and clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
After the purchase, Wouters said, “Jobs and job growth are staying right here. The critics will say jobs are moving to China. That's not happening. What is happening is–and you have my word that that’s the case–this is an investment in Cirrus as we know it today, our production will stay here, our growth will stay here, new product development will be here and incremental volume will be produced out of these factories.”
“Caiga is dedicated to being an international leader in the provision of general aviation products and services,” said Caiga president Meng Xiangkai. “We are optimistic to begin our partnership with Cirrus and add Cirrus’s strong brand as the cornerstone in our aviation product portfolio. We are deeply impressed with Cirrus’s performance in the global general aviation industry, especially with its consistent product performance, comprehensive safety features, outstanding management team, highly skilled employee base and advanced production facilities as well as its expanding global footprint. We look forward to working with Cirrus’s management team to build upon Cirrus’s proven success and to further expand production volume to cement Cirrus’s existing leadership position in the global general aviation industry, as well as to produce greater job opportunities in Duluth and Grand Forks.”
As for the Vision jet, Wouters said, “We got into this [Caiga deal] looking for capital for the jet.” He added that Caiga’s investment “will expedite product development.” The jet is in the detail design phase, and some progress continues. “We’re making production tooling for the stabilizer and other parts of the airplane,” he said. “Detail design is moving forward. Not as fast as I’d like. We’re making progress, and testing for the parachute [system] has gone excellently.” o