TransDigm Group Incorporated (
announced an offering of guaranteed senior notes worth $500
million of principal amount in aggregate due 2021. The notes will
be sold through private placement among potential buyers.
The notes will be subordinated to the company's existing
senior secured credit facilities. TransDigm will use the proceeds
from the debt offering to finance its dividend to common stock
holders totaling $1 billion to $1.8 billion, which will further
be backed by an additional term loan of $700 million and cash on
hand. The proceeds will also be utilized for all the related
transactions costs and general administrative expenses.
The company has not yet disclosed the interest on the notes.
The relevant rates, prices and terms of the offer will be decided
later on. The issue being a private placement will not attract
registration requirements as per the Securities Act.
With a strong free cash flow and meticulous capital structure,
TransDigm seems to be utilizing its resources for inorganic
growth, which are helping it boost its core operations. The
company's financial performance continues to reflect its proven
operating strategy as one that consistently creates real
intrinsic value for shareholders.
In first quarter 2013, TransDigm had cash and cash equivalents
of $554.4 million with long-term debt of $4.3 billion and
shareowners' equity of $598.8 million compared with $440.5
million, $3.6 billion and $1.2 billion, respectively in the
TransDigm designs, produces and supplies highly engineered
proprietary aerospace components with significant aftermarket
content. TransDigm develops highly customized products to solve
specific needs of aircraft operators and manufacturers. It
attempts to differentiate itself on the basis of engineering,
service and manufacturing capabilities.
TransDigm presently has a Zacks Rank #3 (Hold). Some other
companies in the industry worth considering at the moment include
Astronics Corporation (
Kratos Defense & Security Solutions, Inc. (
, each with a Zacks Rank #1 (Strong Buy), while
Alliant Techsystems Inc. (
has Zacks Rank #2 (Buy).
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