Private Equity Grand Slam: $375M into $3B in 17 Months

Back in June 2005, the Canadian private equity firm, Onex formed a new company, Spirit AeroSystems Holdings, to buy the aircraft component factory business from The Boeing Company (NYSE:BA).

In the deal, Onex invested roughly $375 million and borrowed $700 million.

This week, Spirit went public. And it was a huge windfall for Onex, which got $1.16 billion in cash plus an equity stake worth about $1.9 billion.

Another example of private equity firms feeding at the trough? Perhaps. However, Onex had to deal with contentious negotiations with Spirit's unions. Basically, the unions agreed to wage cuts -- in exchange for equity.

It was certainly a good move for workers. On average, a union employee got about $60,000 in a stock windfall.

Also, Onex made some other smart moves, such as purchasing a factory from BAE Systems PLC (ADR) (OTC:BAESY).

Oh, and timing has been good, too. There's been a big jump in airline orders -- especially for Spirit's largest customer, Boeing.

Tom Taulli is the author of various books, including the Complete M&A Handbook. He operates InvestorOffering.com.