American investors hoping to make bid for Cirrus

Talk about it

Two weeks after news broke that Cirrus Aircraft would be sold to Chinese interests, a group of would-be investors has mounted an effort to make a counteroffer that would bring ownership of the company back into domestic hands.

Brian Foley, an aviation industry analyst who is spearheading the drive for ownership of the Duluth-based airplane maker, said the initiative began innocently enough with a piece he published last week.

“It was about why China might now be buying American general aviation companies. It was an innocuous analysis piece. But after its publication, I started getting all this feedback about what a shame it was that a U.S.-born-and-bred company could be going overseas,” Foley said.

Cirrus CEO Brent Wouters has offered assurances that there are no plans to move the company’s airplane production out of Duluth. But Foley recognized that the pending sale had struck a nerve and began to toy with the idea of an alternative. He found people were quite receptive.

On Tuesday he wrote: “Cirrus is an American success story that started in a humble dairy barn, introduced important new technologies and rocketed to market leadership. So it’s not surprising that our U.S. aviation community would take an interest in this pending sale.

“But what surprised me was the speed, passion and near-unanimity of the feedback we received. I didn’t talk to anyone who wanted to see Cirrus shipped overseas. People wanted this company to be owned and operated on American soil, period.”

Foreign ownership doesn’t necessarily put Duluth jobs in peril. Cirrus’ current majority owner, Arcapita Inc., an investment arm of the First Islamic Bank of Bahrain, acquired a 58 percent stake in the company for about $100 million in 2001, and has not significantly outsourced work.

Speaking by phone Thursday from his office in Sparta, N.J., Foley said he has received numerous inquiries from people interested in helping to buy Cirrus. Foley said he even talked to an entity very interested in buying the company single-handedly.

But a group effort remains a real possibility, as well, according to Foley.

“We don’t necessarily need one sugar daddy. Maybe there is strength in numbers,” he said, noting that a number of people with substantial wherewithal, experience and passion have expressed interest in being part of an investment group that could make a bid for Cirrus.

Although the financial details of Cirrus’ pending sale to China Aviation Industry General Aircraft Co. have not been publicly disclosed, Foley anticipates the company could fetch north of $200 million. That may sound like a daunting sum, but Foley believes it’s doable, based on the encouraging response he has received so far.

But before would-be investors can put together an offer, Foley said they would need to obtain more detailed information about the company and its operations. He contacted Cirrus on Tuesday but so far has received no response.

Calls to the company Thursday by the Duluth News Tribune were not returned either.

“I’m hoping we will hear from Cirrus or Arcapita soon. I would think they’d be delighted to learn they have another potential offer on the table,” he said.

Still, Foley said prospective investors will need more information before they can proceed.

“A counteroffer can’t be put together without Cirrus’ cooperation,” he said. “The next move is theirs.”

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