Cirrus Industries, Inc.

Ownership

Arcapita

Company Description

Cirrus, headquartered in Duluth, Minnesota, is the second largest manufacturer of single-engine, piston-powered general aviation aircraft in the world.  The Company designs, manufactures and markets technologically advanced aircraft principally for the personal transportation market.  Cirrus has a history of product leadership and innovation, having introduced the first composite airframes and aircraft parachute safety system in the industry.

Objective

Cirrus had increased its relevant market share from less than 1% in 1999 to over 35% in 2007, demonstrating the superiority of its aircraft relative to competitors' products.  In addition to its success in the piston-powered market, the Company had begun the development of a new jet aircraft which represented a significant growth opportunity.  The economic downturn in 2008 led to an industry-wide decrease in demand for personal aircraft, thus limiting the amount of capital that Cirrus could invest into new product development.  The Company was in need of outside capital to support growth of the core business, as well as the development and commercialization of the new jet aircraft.

Advisory Role

VRA Partners was engaged by the Company and Arcapita to serve as exclusive financial advisor in the execution of a dual-path process whereby providers of investment capital, as well as potential strategic acquirers, were approached simultaneously.  This approach increased the probability of success and also kept all viable options available to the Company.  The marketing process generated  proposals to provide investment capital to the businesss, as well as interest from prospective acquirers.  Due to the time and capital requirement to complete development and commercialization of the proposed jet aircraft, the Company felt the business would be best served by a sale to a strategic buyer with the ability to invest significant capital and a long-term outlook.

Result

Cirrus was acquired by China Aviation Industry General Aircraft Co., Ltd. (“CAIGA”), a subsidiary of Aviation Industry Corporation of China.  CAIGA controls four listed companies in China with total revenues of approximately US$3 billion.  CAIGA’s primary businesses include the manufacture of piston, jet and amphibious aircraft as well as their parts and components.