Cirrus 'Not On The Block' Right Now
No matter which way you look at it, the general aviation
landscape for 2008 may look very different from just a year ago...
but not nearly as much as some recent reports might suggest.
"Bah-Humbug..." notes Alan Klapmeier who seems somewhat bemused
and disappointed in the way that some of his recent remarks were
portrayed in a 'Mergermarket' financial article that hit the wires
Thursday. The gist of the reporting (especially the title) in an
article that has appeared in such publications as London's
Financial Times, seems to suggest that Majority Stockholder,
Arcapita, wants to sell its stake in Cirrus Design with some sense
of immediacy.
"Nothing could be farther from the truth," reports Cirrus
Founder Alan Klapmeier.
Klapmeier told ANN, exclusively, that he did make some related
remarks in a recent interview, but that the genesis of the Arcapita
rumors revolves around an innocent remark that Alan made that
simply asserted that, like all other investors, sooner or later
Arcapita would like to profit from their investment... The
published report, however, seems to suggest that Arcapita might
want their "money back" in the near future. Klapmeier assured
ANN that this suggestion was, "way off the mark."
The article posits that Arcapita, which owns 58 per cent of
Cirrus Design, wants out. The article also quotes a number of
unnamed sources in regards to potential buyers or bidders for the
company. One unnamed source, reported to be familiar with the
company, apparently says that Arcapita has sized up a new GA
playing field on which Cessna has a competitive, high-performance
composite low-wing, and decided its best bet is to sell either its
stake in Cirrus, or the whole company, to someone else. The
Financial Times report adds that it has interviewed various
industry sources which predict likely bidders for Cirrus to be
Diamond, Bombardier, Embraer, or even Cessna.
As previously reported by ANN, Arcapita/Cirrus was reported to
be considering a bid for the assets of Columbia, but after several
days of due diligence, declined to compete in the bidding, which
was ultimately won by Cessna.
Klapmeier does tell ANN that a number of legal/financial
resources have been brought into Cirrus's plans, of late, in order
to look at the future of the company. Klapmeier notes that
such resources make sense for a company that will do at least $350M
in business in the next year and is about to embark on a more
fast-paced research and development program that will result
in a certified personal jet aircraft for the GA market within a few
years. As a consequence of that strategy, CD is consulting with
Financial experts at Credit Suisse and JPMorgan, as well as a
number of qualified law firms to evaluate its future plans.
"We're doing what any company needs to do at this stage of our
development... but Arcapita has been a big part of our success for
several years now and we have no indication that they won't still
be, any time soon."
One aspect of the article that Klapmeier agrees with, reported
his feelings that the industry has great growth potential, and that
Cirrus is always, quote "...looking for partners who agree with
that."