CLEVELAND, Nov. 24, 2020 /PRNewswire/ -- TransDigm Group
Incorporated (NYSE: TDG) today announced it has entered into a
definitive agreement to acquire Cobham Aero Connectivity ("CAC" or
"the Company") for approximately $965
million in cash, including tax benefits.
Additionally, TransDigm provided an update with regard to its
previously announced plans to potentially divest a select number of
defense-oriented operating units that were acquired as part of the
Esterline acquisition.
Acquisition of Cobham Aero Connectivity ("CAC")
Cobham Aero Connectivity is headquartered in Marlow, UK.
The Company is a leading provider of highly engineered antennas and
radios for the aerospace end market. The products are primarily
proprietary with significant aftermarket content and have a strong
presence across major defense platforms as well as select
commercial applications. The Company is expected to generate
approximately $225 million in revenue
in 2020. Nearly 60% of CAC's revenue is derived from
international sales, and the Company has a strong presence across a
diverse range of both helicopters and fixed wing aircraft.
The Company operates from two primary facilities in Marlow, UK and
Prescott, Arizona. CAC employs approximately 760 people.
The acquisition, which is expected to close during the first
calendar quarter of 2021, is subject to regulatory approvals and
customary closing conditions. The acquisition is expected to
be financed through existing cash on hand.
Potential Divestitures of Former Esterline Operating
Units
The operating units under consideration for potential
divestiture were acquired by TransDigm in March 2019 as part of the Esterline Technologies
acquisition. Since the acquisition, these businesses have
functioned as independent operating units under TransDigm's
ownership. These operating units primarily serve the defense end
market and have combined annual revenue of $250 to $300
million. TransDigm is now working with outside
advisors to assist in the process of identifying and approaching
potential buyers. At this time, the timeline for any
announced divestitures remains uncertain.
W. Nicholas Howley, TransDigm's
Executive Chairman, stated, "We are pleased to announce the
acquisition of Cobham Aero Connectivity. This business fits well
with our long-standing strategy. The CAC products are almost all
proprietary and over 70% of CAC's revenue comes from the
aftermarket. The Company is primarily a defense business. The
businesses we are considering for divestiture are also good
businesses, but do not fit as well with our long-standing
proprietary and aftermarket strategy."
Kevin Stein, TransDigm's
President and Chief Executive Officer, added, "We are excited about
the acquisition of Cobham Aero Connectivity. The Company has
established positions across a diverse range of new and existing
aircraft platforms. Major customers include Airbus, Boeing,
Raytheon Technologies, AgustaWestland/Leonardo and Elbit. We also
see significant opportunity for ongoing upgrade and retrofit
activity as the demand for faster and more data intensive
communication continues. As with all TransDigm acquisitions, we
expect the CAC acquisition to create equity value in-line with our
long-term private equity-like return objectives."
About TransDigm
TransDigm Group, through its wholly-owned subsidiaries, is a
leading global designer, producer and supplier of highly engineered
aircraft components for use on nearly all commercial and military
aircraft in service today. Major product offerings, substantially
all of which are ultimately provided to end-users in the aerospace
industry, include mechanical/electro-mechanical actuators and
controls, ignition systems and engine technology, specialized pumps
and valves, power conditioning devices, specialized AC/DC electric
motors and generators, batteries and chargers, engineered latching
and locking devices, engineered rods, engineered connectors and
elastomer sealing solutions, databus and power controls, cockpit
security components and systems, specialized and advanced cockpit
displays, aircraft audio systems, specialized lavatory components,
seat belts and safety restraints, engineered and customized
interior surfaces and related components, advanced sensor products,
switches and relay panels, thermal protection and insulation,
lighting and control technology, parachutes, high performance
hoists, winches and lifting devices, and cargo loading, handling
and delivery systems.
Forward-Looking Statements
Statements in this press release that are not historical facts
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "believe,"
"may," "will," "should," "expect," "intend," "plan," "predict,"
"anticipate," "estimate," or "continue" and other words and terms
of similar meaning may identify forward-looking statements. All
forward-looking statements involve risks and uncertainties that
could cause TransDigm Group's actual results to differ materially
from those expressed or implied in any forward-looking statements
made by, or on behalf of, TransDigm Group. These risks and
uncertainties include but are not limited to: the impact that the
COVID-19 pandemic has on the TransDigm Group's business, results of
operations, financial condition and liquidity; the sensitivity of
TransDigm Group's business to the number of flight hours that its
customers' planes spend aloft and its customers' profitability,
both of which are affected by general economic conditions; future
geopolitical or other worldwide events; cyber-security threats and
natural disasters; TransDigm Group's reliance on certain customers;
the U.S. defense budget and risks associated with being a
government supplier including government audits and investigations;
failure to maintain government or industry approvals; failure to
complete or successfully integrate acquisitions, including
TransDigm Group's acquisition of Esterline; TransDigm Group's
indebtedness; potential environmental liabilities; liabilities
arising in connection with litigation; increases in raw material
costs, taxes and labor costs that cannot be recovered in product
pricing; risks and costs associated with TransDigm Group's
international sales and operations; and other risk factors. Further
information regarding the important factors that could cause actual
results to differ materially from projected results can be found in
TransDigm Group's Annual Report on Form 10-K for the fiscal year
ended September 30, 2020 and other
reports that TransDigm Group or its subsidiaries have filed with
the Securities and Exchange Commission. Except as required by law,
TransDigm Group undertakes no obligation to revise or update the
forward-looking statements contained in this press release.
Contact:
Investor Relations
(216) 706-2945
ir@transdigm.com