Boeing had a terrible 2024 and needs to raise cash to pay down debt. The company reported losses of $11.8 billion last year and was forced to raise $21 billion in October. While the company had only $10.5 billion in cash at the end of September, it ended the year with $26.3 billion after the debt and equity raise. However, with a high debt load of $58 billion, up $10 billion from last year, the company is looking at non-core assets to raise cash. According to news reports, Jeppesen, the company’s navigation unit, has attracted substantial interest from industry players and private equity firms. Jeppesen is perhaps best known for its airport instrument approach charts, which, since 1934, evolved as the industry standard. The company is the undisputed leader in the pilot information market, from old-style chart books to iPad-based electronic flight bags. While this is tangentially related to aircraft, as Jeppesen flight plans are used throughout the industry, they are not core to manufacturing aircraft. Given its leadership position, it is drawing substantial interest. Key players in avionics, RTX’s Collins Aerospace and Honeywell International, are interested, given the potential synergies with their avionics. Other aerospace firms, including GE Aerospace and TransDigm Group, have also expressed interest. Jeppesen has also attracted interest from the private equity community, including Advent, Blackstone, Carlyle, Thoma Bravo, Veritas, and Warburg Pincus. The Bottom Line Boeing could receive $6 to $8 billion in cash from the sale of Jeppesen, which would shore up its liquidity. The profitable unit serves many aviation customers, from amateur pilots to airlines. Boeing acquired the business for $1.5 billion in 2000 but is considering divesting it to help reduce its $58 billion debt load. Boeing will report its 2024 results formally tomorrow before the market opens. Further information on its strategy and corporate portfolio may be forthcoming. Stay tuned.
