Boeing’s Jeppesen Deal Is Shortsighted — Even at $10.6 Billion
The planemaker takes the money now instead of relying on its hefty margins for years to come.
Jeppesen’s products are in reliable demand.
Photographer: Benoit Ducrocq/AFP/Getty Images
Ask the chief executive officer of any manufacturing company to draw up the characteristics of a dream business and the list should include double-digit profit margins, recurring revenue, a software-based product and a large set of loyal customers.
Boeing Co.’s Jeppesen unit, a flight navigation and aircraft diagnostics business, has all of these highly sought-after qualities. It’s no wonder that Boeing was able to reach an agreement to sell Jeppesen and its ancillary units to the private equity firm Thoma Bravo for $10.6 billion, a price that surpassed Wall Street estimates. These type of businesses don’t come up for sale often, and the competition must have been fierce.