TransDigm To Buy Data Device Corporation For $1B In Cash
TransDigm Group Incorporated (NYSE: TDG) disclosed that it reached a definitive deal with private equity investment company Behrman Capital to purchase Data Device Corporation portfolio company for $1.0 billion in cash. The company expects to fund the acquisition through a combination of cash on hand, existing availability under its revolving credit facility and fresh debt. The company expects the acquisition to close before the end of the current year, subject to regulatory approvals and customary closing conditions.
TransDigm said that DDC, which is a leading supplier of databus and power supply products for the global military and commercial aerospace markets, is expected to generate more than $200 million revenue for the fiscal year ending December. The company added that about 75 percent of it will come from the defense market and the remainder primarily from the commercial transport market.
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Similarly, about 70 percent of revenue is generated from the aftermarket, with nearly all of the revenue from proprietary and sole source products while about 45 percent of revenue is generated from customers outside of the America.
TransDigm's chairman and CEO, Nicholas Howley, commented, "DDC has a strong presence across major military aircraft platforms and a growing presence on commercial aircraft. This is another sizable acquisition opportunity that meets our strategic, operational and value-creation criteria."
He continued, "The vast majority of DDC's revenue comes from highly engineered, proprietary products with substantial aftermarket content. We are pleased with the opportunity to acquire a business of this size that has such an outstanding reputation with its customers and where we see opportunities for significant value creation."
TransDigm closed Monday trading at $248.74.
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