8-K: Boeing Sells Digital Aviation Solutions to Thoma Bravo for $10.55 Billion

Boeing has reached an agreement to sell portions of its Digital Aviation Solutions business to Thoma Bravo for $10.55 billion in cash.

Summary

• Boeing has agreed to sell parts of its Digital Aviation Solutions, including Jeppesen, ForeFlight, AerData, and OzRunways, to Thoma Bravo for $10.55 billion.
• The transaction is expected to close by the end of 2025, pending regulatory approval and customary closing conditions.
• Boeing will retain core digital capabilities related to fleet maintenance, diagnostics, and repair services.
• Approximately 3,900 employees are part of the Digital Aviation Solutions organization, with some remaining at Boeing and others transferring to Thoma Bravo.
• The sale is part of Boeing's strategy to focus on core businesses and strengthen its balance sheet.

Sentiment

Score: 8

Explanation: The sentiment is positive due to the significant transaction value, strategic alignment for both companies, and the expectation of future growth and innovation. The language used in the press release is optimistic and forward-looking.

Positives

• The sale will strengthen Boeing's capital structure and allow it to focus on its core businesses.
• Boeing will retain key digital capabilities for fleet maintenance and diagnostics.
• Thoma Bravo's investment is expected to drive growth and innovation in the Digital Aviation Solutions business.
• The agreement includes principles for data sharing and future collaborations to ensure continuity of operations.

Risks

• The transaction is subject to regulatory approval and customary closing conditions, which could delay or prevent the deal from closing.
• There are risks related to general economic conditions and regulatory changes that could affect the transaction.
• The ability of the parties to consummate the transaction is a risk factor.

Future Outlook

The transaction is expected to close by the end of 2025, subject to regulatory approval and customary closing conditions. Boeing will retain core digital capabilities for fleet maintenance, diagnostics, and repair services, while Thoma Bravo will focus on growing the Digital Aviation Solutions business.

Management Comments

• Kelly Ortberg, Boeing president and chief executive officer, stated that the transaction is an important component of their strategy to focus on core businesses, supplement the balance sheet, and prioritize the investment grade credit rating.
• Chris Raymond, president and chief executive officer of Boeing Global Services, said that the transaction enables all parts of the digital portfolio to focus on their strengths and that their commitment to meeting customers' needs is unwavering.
• Holden Spaht, a Managing Partner at Thoma Bravo, expressed pride in investing in an important technology platform in the aerospace and defense industry and excitement to build on Jeppesen's track record.
• Scott Crabill, a Managing Partner at Thoma Bravo, noted the business's impressive growth transformation and strong momentum and looked forward to supporting the company's standalone growth objectives.

Industry Context

This announcement reflects a trend of aerospace companies focusing on their core manufacturing and engineering capabilities while divesting non-core digital assets to private equity firms specializing in software and technology. This allows Boeing to streamline its operations and strengthen its balance sheet, while Thoma Bravo can leverage its expertise to grow the Digital Aviation Solutions business.

Comparison to Industry Standards

• The $10.55 billion valuation is significant in the aviation software and data analytics space.
• Comparable transactions include Thoma Bravo's acquisition of Ansys for $29.7 billion, which shows their commitment to investing in engineering software.
• Other comparable companies in the aviation software and data analytics space include Sabre Corporation, which has a market capitalization of around $4 billion, and FlightAware, which was acquired by Collins Aerospace.
• The valuation multiple for this transaction will depend on the specific revenue and profit figures for the divested assets, but it is likely to be in line with other software and data analytics deals in the industry.

Stakeholder Impact

• Shareholders: The sale is expected to strengthen Boeing's balance sheet and allow it to focus on core businesses, potentially increasing shareholder value.
• Employees: Approximately 3,900 employees will be affected, with some remaining at Boeing and others transitioning to Thoma Bravo. Boeing is working to ensure a seamless transition.
• Customers: The agreement includes principles for data sharing and future collaborations to ensure continuity of operations and meet customer needs.
• Suppliers: The impact on suppliers is not explicitly mentioned, but the transaction is expected to drive growth and innovation in the Digital Aviation Solutions business, potentially benefiting suppliers.

Next Steps

• Obtain regulatory approvals for the transaction.
• Satisfy customary closing conditions.
• Transition the Digital Aviation Solutions business to Thoma Bravo.
• Ensure a seamless transition for employees and customers.

Key Dates

Keywords

Digital Aviation Solutions, Thoma Bravo, Jeppesen, ForeFlight, AerData, OzRunways, Boeing, Acquisition, Sale, Transaction