TransDigm Group Incorporated
) has agreed to buy Airborne Systems Inc from Metalmark Capital.
The all-cash deal is valued at approximately $250 million and is
expected to close by the first quarter of 2014, subject to
The acquisition is a strategic move by TransDigm as the nature
of operation, commercial and military clients and products of
Airborne Systems perfectly complement TransDigm's existing
portfolio. Through this acquisition, TransDigm will be able to
leverage Airborone's proprietary personnel parachutes, cargo
aerial delivery systems, emergency escape systems, naval decoys
and other related products, thereby enhancing the growth
prospects for TransDigm.
Airborne Systems is owned by Metalmark Capital, a leading
private equity firm investing in targeted sectors. Headquartered
in New Jersey, Airborne Systems is the leading designer and
manufacturer of personnel parachutes, cargo aerial delivery
systems, emergency escape systems, naval decoys and other related
Apart from the U.S. government, 50 other countries including
the U.K. rely on the company's highly proprietary products.
Airborne's products include current generation troop parachutes,
latest generation steerable parachutes for tight drop zone
landings, and the ram-air, maneuverable parachute systems used
for special operations. The company's precision-guided
cargo parachutes are used for high altitude GPS-driven cargo
In 2013, Airborne generated revenues of about $160 million.
The domestic customers account for about 45% of its revenues
while the international customers contributed approximately 55%.
Therefore, the large international customer base is expected to
provide a buffer for TransDigm, given the uncertainties of the
U.S. defense spending environment.
TransDigm will further strengthen its presence in the military
or defense market, which is one of the primary revenue streams
Based in Cleveland, OH, TransDigm Group recently has been
pursuing strategic acquisitions to strengthen its presence in the
aerospace industry. All the acquisitions the company has been
making are accretive to earnings and revenues. In the last
reported quarter (4Q13), both earnings of $1.75 and revenues of
$539.7 million surpassed the Zacks Consensus Estimate of loss of
18 cents and $538 million, respectively. This apart, both
improved year on year primarily driven by the positive synergies
from the acquisitions.
TransDigm currently has a Zacks Rank #3 (Hold). Some
better-ranked stocks in the aerospace sector include
Alliant Techsystems Inc.
Elbit Systems Ltd.
). While Alliant Techsystems and Elbit Systems carry a Zacks Rank
#1 (Strong Buy), Hexcel holds a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
ELBIT SYSTEMS (ESLT): Free Stock Analysis
HEXCEL CORP (HXL): Free Stock Analysis Report
TRANSDIGM GROUP (TDG): Free Stock Analysis
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