The Air Current is reporting that the sale of ForeFlight and Jeppesen to software investment fund Thoma Bravo will be finalized as early as Nov. 3. The news came out of Boeing earnings call earlier this week, according to the Air Current. The sale was announced last April and was estimated to be done by the end of the year. Boeing said it was selling the two units, along with OzRunways and AerData, for $10.55 billion in cash to raise money and to further its new leadership’s focus on Boeing’s core businesses.
There has been no further news on what the change in ownership might mean for the subscribers of Jeppesen and ForeFlight products, but Thoma Bravo said at the time it’s planning to grow the subsidiaries. “Thoma Bravo has a long track record of backing leading technology companies in partnership with existing management,” the company said in April. “We look forward to supporting the company’s standalone growth objectives through strategic investments, operational best practices and a shared commitment to innovation and long-term value creation.”
It would appear Boeing is using the money from the sale to buy back Spirit Aerosystems, the former Boeing structures company that builds 737 MAX fuselages, among other aircraft components, in Wichita. The loss of a door plug on a MAX in early 2024 put scrutiny on the build quality of those fuselages, and Boeing announced the re-acquisition while the investigation was underway. Spirit was formed in 2005 when Boeing spun off the Wichita factories to Onex Corporation, which expanded the business to build components for Bombardier and Airbus.
Sounds like a good move to buy back part of their manufacturing. Every time I’ve seen companies sell off or subcontract work (software or hardware), it becomes lower quality or they have to hire more people to do QA on the work being produced, resulting in extra costs and complexity. But short term $$$ seem to trump good sense.
Subscription price increase in 5,4,3,2….
I’m betting on at least a 30% increase.
If I see increases at a 30% rate on FF and Jeppesen I will be canceling my subscriptions. There are plenty on EFB programs available, as for the Jeppesen subscription my navigator would just have to use expired data, I would probably purchase a month when needed.
Whenever I read an article like this, I have to smile. Back in the 1990s, Peter Lynch, former manager of the Fidelity Magellan mutual fund, wrote a book entitled “One Up on Wall Street”. At the time, the Magellan fund was the top-rated mutual fund for smaller investors and Lynch was considered along with Warren Buffet as an investor genius. The book was intended as a small investors guide to recognizing value in corporations and where to invest your money. One of the chapters was titled “Diworsification”, where big successful companies would take profits and “diversify” into other businesses. Unfortunately, the acquired companies often did not match the parent company’s business philosophy, or it was intended as a cash cow for the parent who bled it dry. A few years later, the parent announced that it was “returning to its core competencies” by selling off the subsidiary to try and recover some of its original investment. When Boeing bought ForeFlight and Jeppesen, I made a mental note as to how long it would be before they dumped them for cash. Also, Boeing trying to reacquire the Spirit facilities is kind of that same idea in reverse – spinning off a core business to a third party to dump overhead. The result is all too often a lower quality component that actually costs more to inspect and make right. Sometimes, even large companies make big (and expensive) mistakes.
May be time to investigate Garmin Pilot….
I made the switch to Garmin Pilot and really enjoy it. It is however like Apple to Android and took a good bit to get used to it.
Joined Jeppesen shortly after its aquisition from Time Warner and spent my time in the company under Boeing flag. Jepp is a cash cow and selling it may not be what Boeing brass will write into its history books as a particularly smart move.
Should work.