When Raytheon sold Beechcraft for what its current CEO, Bill Boisture, once called a “startling price” of $3.3 billion in early 2007, buyers Goldman Sachs and Onex Corp. were banking on the continuation of the then flourishing business jet and general aviation market. They each put in $500 million of their own cash, but borrowed additional funds for the acquisition. The result was a company “leveraged to the hilt,” and, when the downturn that pummeled the economy beginning in 2007 and impacted industry in 2008-09, “its fate was sealed,” Boisture, who took the helm of Beechcraft in 2009, said. “You simply had to do the math” to know that restructuring was needed.

Six years later, Beechcraft has reorganized under Chapter 11 bankruptcy protection, pared down its employee base and shuttered its business jet production. And its asking price—$1.4 billion—is less than half of what it was in 2007.

But the company has shed of much of the debt that came with the Goldman Sachs/Onex acquisition, and for the first time in a long time, Boisture says, it has a prospective new owner committed to the general aviation market.

Cessna Aircraft parent Textron on Dec. 26, 2013, announced it would acquire Beechcraft by mid-2014, a move that would bring two of the longest-running industry rivals in general aviation (and the sector's most historic names) together under a single owner. Beechcraft's equity holders have signed off on the agreement, which is subject to the customary approvals.

Textron Chairman Scott Donnelly has been interested in Beechcraft for a long time. When it entered bankruptcy in 2012, he acknowledged eyeing at least parts of the company, and reiterated this when rumors surfaced last fall that Beechcraft was again for sale. “We always felt it made a lot of sense,” he says.

To Donnelly, Beechcraft is a perfect fit with Textron's existing aviation holdings. Beechcraft's piston line complements Cessna's, while its King Air twin turboprop fills a gap between Cessna's single-turboprop Caravan and jet products.

The acquisition would provide Textron with a King Air twin-turboprop family that has experienced significant growth this year. But it also will provide a support network that, when combined with Cessna's, will be an extensive global support provider. Perhaps most important, the acquisition will bring with it an installed base of close to 36,000 Hawker and Beechcraft aircraft that must be serviced.

Textron is even buying the Premier and Hawker 4000 jet lines that Beechcraft had been shopping since it emerged from Chapter 11 a year ago. A buyer or buyers were lined up for those programs, but Textron requested those lines be a part of the deal. “We wanted to provide consistent support to all our customers, including the Hawker 4000 and Premier,” Donnelly says. He acknowledges that the numbers of those aircraft are smaller, but rather than parcel out those programs, “It was more important for us to unite the customer support.”

While Textron talks of the fit between the Beechcraft and Cessna product lines, it does not mean Textron is intent on creating a large Cessna. Nor does it mean the end of Beechcraft. Donnelly praises both the Hawker and Beechcraft brands as “huge values” and a significant part of what Textron is acquiring.

“Beechcraft is one of the most powerful aviation brands in the world,” Boisture says, adding that the Hawker brand is similarly important. “The base is a very valuable asset.”

From a financial reporting standpoint, Cessna and Beechcraft likely would be combined under a single structure, says Textron spokesman David Sylvestre. But from a marketing and operational standpoint, the two entities likely will remain separate with their own identities, Sylvestre says. He adds that, at this point, he does not see changes in the top leadership of Cessna and Beechcraft, noting that both are such large operations they each need strong leadership.

However, layoffs are probable. Textron sees about $65 million in cost overlaps and other synergies between the companies and up to $85 million over three years.

Transition teams are being formed to determine how best to fold Beechcraft into Textron. Boisture says he, Cessna CEO Scott Ernest and Donnelly likely will meet monthly leading up to the completion of the acquisition.

Donnelly does not anticipate any major moves to sell off facilities or other assets, saying Beechcraft has already downsized and restructured significantly in recent years.

Textron, however, is clear about having no desire to resume production of the Beechcraft jet lines. Donnelly notes that, with the Hawker jet lines closed, it provides an opportunity for existing Beechcraft customers to opt for Cessna's Citation line.

Once complete, Textron will have one of the broadest ranges of aviation products in the industry; Bell helicopters and Lycoming engines are part of Textron's domain. It also will have a dominant position in general aviation manufacturing, at least in terms of unit production. “It is a very competitive marketplace,” Donnelly says. “The acquisition is great for our customers. It really broadens our product lines.”

Boisture, noting the increased globalization of the market, says companies now must be “of some scale,” and the acquisition will enhance Textron's status. “That's the strategic meaning of this transaction,” he says.

It also keeps Beechcraft in U.S. hands. Boisture notes that not only does it represent a commitment to U.S. manufacturing, “this move by Textron is a major commitment to Wichita.”

The acquisition provides Textron more depth in the defense and special mission market, where Beechcraft has a well-established infrastructure. Textron is moving to further tap into that market with its new Textron AirLand twin jet, the Scorpion. It is a very different product from Beechcraft's turboprop aircraft, which are in military trainer and special mission uses, but Donnelly sees a “potential customer channel. . . . There are synergies.”

Analysts have viewed the acquisition favorably. Leading up to the announcement, RBC Capital Markets reported, “clearly investors are indicating that they view this as a 'good deal.' Textron . . . has the capacity to do a deal of this size. The remaining Beechcraft business is a solid annuity franchise that should complement what Cessna has.” J.P.Morgan had called the purchase a good fit for Textron, and said: “[W]e would expect bumps along the way . . . [but] there is still more upside if this all works out.”

Textron is gaining a company that is expected to generate $1.8 billion this year, has experienced a 47% increase in deliveries through the first three-quarters of 2013, and has achieved its highest book rates in the past three years.

Boisture sees Beechcraft benefiting from having a home where it will receive adequate financial backing. “For the first time in well over a decade, the company will enjoy a strong stable parent committed to general aviation.”