Aerospace giant closes massive asset sale to private equity firm, marking dramatic retreat from former CEO’s digital empire ambitions
Boeing completed the sale of several digital businesses to private equity firm Thoma Bravo on Monday, securing $10.55 billion in cash as the struggling aircraft manufacturer works to strengthen its finances and refocus on core operations.
The all-cash transaction marks the end of Boeing’s once-ambitious push into digital aviation services. Assets sold include aircraft management software provider AerData and flight-service information platforms ForeFlight, Jeppesen and OzRunways, all previously housed under the company’s Boeing Global Services division.
“The completion of this sale strengthens Boeing’s capital structure and allows Boeing to focus on core business, including the retained digital services portfolio,” Boeing said in a statement Monday.
The divestiture caps a dramatic strategy reversal for Boeing. Under former CEO Dennis Muilenburg, the company set out to aggressively expand its services business last decade, with plans to grow Boeing Global Services revenue to $50 billion annually by the mid-2020s.
But that goal collapsed after a series of crises hammered the aerospace giant. The 737 Max grounding following two fatal crashes, the COVID-19 pandemic, and persistent quality and safety issues derailed Boeing’s expansion plans. BGS generated $14.6 billion in revenue in 2018, nowhere near the ambitious target.
Current CEO Kelly Ortberg has pivoted Boeing back toward aircraft manufacturing and aftermarket support. The company first announced its intention to sell the digital assets to Thoma Bravo in April.
Boeing said the sale will help the company maintain its investment-grade credit rating, a critical priority as the manufacturer seeks to stabilize its financial position.
The retained digital capabilities will continue providing commercial and defense customers with fleet operations, maintenance, diagnostics and repair services using aircraft and fleet-specific data, Boeing said.
Key Takeaways
- Boeing finalized a $10.55 billion all-cash sale of digital businesses to investment firm Thoma Bravo on November 3, strengthening the company’s capital structure.
- Assets divested include AerData, ForeFlight, Jeppesen and OzRunways, which had been part of Boeing Global Services division.
- The sale represents a major strategy shift from former CEO Dennis Muilenburg’s goal of growing services revenue to $50 billion annually, a target made untenable by the 737 Max crisis, COVID-19 pandemic and quality issues.
- Current CEO Kelly Ortberg is refocusing Boeing on core aircraft manufacturing and aftermarket support, with the sale helping maintain the company’s investment-grade credit rating.
