TransDigm Group Incorporated
) recently announced that it has acquired Aero-Instruments Co., LLC
for about $35 million in cash. Cleveland-based Aero Instruments has
been engaged in supplying aerospace components to the concerned
industry for about 87 years.
TransDigm has been aggressively targeting comparatively smaller
companies who are mostly niche players since the second half of
2011. The most recent was the acquisition of AmSafe in February
2012 for $750 million. AmSafe is a renowned manufacturer of
aviation passenger seatbelts and airbags. More than 90% of
aircrafts worldwide are using AmSafe's products.
Further, Amsafe is the only company to have a seatbelt airbag
system installed worldwide on both commercial transport and general
aviation aircraft. Moreover, the company also makes different type
of cargo and restraint products.
With employee strength of just about 60, Aero Instruments
primarily designs and manufactures highly engineered air data
sensors that comprise pilot probes, pilot-static probes, static
pressure ports, angle of attack, temperature sensors and flight
test equipment deployed primarily in the business jets and
Aero Instruments derives about 60% of its total revenue from the
aftermarket and about 20% from the military. In fiscal 2011,
approximately 56% of net sales were generated from aftermarket
sales, mainly from the commercial and military aftermarkets.
Therefore, this acquisition of Aero Instruments is a strategic fit
In addition, the company also had a robust third quarter with
its top line and bottom line up 65% and 40%, respectively.
TransDigm Group Inc. designs, produces, and supplies engineered
aircraft components for use on commercial and military aircraft.
The company operates principally in the US.
We maintain a Zacks #3 Rank (short-term Hold rating) on
TRANSDIGM GROUP (TDG): Free Stock Analysis
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