Forstmann Little Will Shed Lear Siegler’s Aerospace Units, Valued at $700 Million

Forstmann Little, which acquired Lear Siegler last month, said Wednesday that it plans to put up for sale the firm’s aerospace operations, estimated by analysts to be worth about $700 million.

The Lear Siegler aerospace subsidiaries consist of four units in Southern California and other operations in Connecticut, Michigan and Ohio. The troubled Piper Aircraft unit is not included in the group.

The subsidiaries are expected to post revenues of about $700 million in fiscal 1987, slightly less than one-third of Lear Siegler’s sales. They are regarded by analysts as among the Santa Monica-based conglomerate’s best operations.

A number of the Southern California units were started by inventor William Lear, an eighth-grade dropout who became a legendary inventor and entrepreneur. Lear merged his company with Siegler in 1962.

Forstmann Little is expected eventually to liquidate the entire Lear Siegler operation, Seidler Amdec Securities analyst John Simon said.

Potential buyers for the aerospace subsidiaries include many large defense industry contractors, including Lockheed and Litton Industries, which recently have indicated they are looking for acquisitions in the defense electronics area.

Lear Siegler was bought out and taken private by Forstmann Little, a New York investment firm, for $2.1 billion after a bidding war involving several other suitors. Last January, Forstmann Little said it had no plans to break up Lear Siegler but acknowledged that it might change its mind after completing the $92-per-share deal. A Lear Siegler spokesman said Forstmann Little has not indicated whether it will sell the units individually or as a group but said that, as of Tuesday, all the units had been legally designated as individual corporations. The move enables them to be sold individually and may signal what Forstmann Little’s investment bankers will decide to do.

The California aerospace units offered for sale include Santa Monica-based Astronics, which produces flight control systems and employs 1,076 people; Developmental Sciences of Ontario, which produces drone aircraft and employes 237; Energy Products of Santa Ana, which produces external fuel tanks for military aircraft and employs 755, and Transport Dynamics of Santa Ana, which produces bearings and employs 254.

The group also includes the Instruments and Avionics Systems Corp. of Grand Rapids, Mich., which employes 3,500 and is the largest unit in the group.