Boeing seeks buyers for Insitu drone unit in push to shed assets

Boeing Co. has hired an adviser to market a defense subsidiary that manufactures small, long-range military drones as the planemaker looks to unload businesses that aren’t central to its core commercial and defense operations, according to people familiar with the talks.

Insitu Inc., which Boeing acquired in 2008, is drawing interest from private equity firms and corporate buyers, said the people, who asked not to be identified because the discussions are confidential. The business, which makes drones used by Ukraine’s military, could fetch about $500 million, according to Jefferies analysts.

A Boeing spokeswoman declined to comment on Insitu’s potential value or the sale discussions. 

Under new Chief Executive Officer Kelly Ortberg, Boeing is taking close look at its defense division’s autonomous systems in a broader effort focus its operations. Boeing also tested buyer interest in its Orca drone submarines last year before deciding not to part with the unit, said two of the people.

Insitu is a pioneer in developing small, uncrewed aircraft systems such as its ScanEagle surveillance and reconnaissance drone. The unmanned aircraft is small enough to be carted in a pickup truck and capable of remaining airborne for 18 hours.

The planemaker completed a review of its sprawling portfolio and plans to shed businesses that aren’t core over the next few months to a year, Ortberg said during the company’s January earnings call. The assets up for sale include the Jeppesen navigation subsidiary, considered a crown jewel for its broad global airline customer base, Bloomberg has reported.

The divestitures will help Boeing focus resources on its key commercial and defense divisions. They could also raise cash to help pay down its more than $50 billion in debt as Ortberg works to turn around the company after six years of crisis. 

During a call with analysts last month, the CEO said any portfolio revisions should be regarded “as more pruning the portfolio, not cutting down the tree.”