TransDigm Strikes $965M Cash Deal for Cobham Aero Connectivity; Kevin Stein Quoted

TransDigm Group (NYSE: TDG) has agreed to acquire a Cobham subsidiary focused on providing antennas and radio systems for the aerospace end market for approximately $965M in cash.

TransDigm said Wednesday it will use existing cash on hand to finance the acquisition of Cobham Aero Connectivity and expects the transaction to close during the third quarter of calendar year 2021, subject to regulatory clearances and other customary closing conditions.

U.K.-based Cobham Aero Connectivity has facilities in Marlow, England, and Prescott, Arizona, and operates with approximately 760 employees. Its products are proprietary with presence across a range of fixed-wing aircraft, helicopters and other major defense systems. The company is expected to record about $225M in 2020 revenue.

Kevin Stein, president and CEO of TransDigm, said Cobham Aero Connectivity has positions across a range of existing and new aircraft platforms and its clients include Boeing (NYSE: BA), Raytheon Technologies (NYSE: RTX), Airbus, Leonardo and Elbit Systems.

“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,” Stein added.

TransDigm also announced that it is working with outside advisers to look for potential buyers as it considers divesting a select number of operating units that were acquired as part of the company’s $4B purchase of Esterline Technologies in March 2019. The operating units have $250M to $300M in combined annual revenue and support the defense end market.

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