TransDigm Group Inc. (TDG) recently announced that it completed the acquisition of Aerosonic Corporation (AIM) by purchasing all its outstanding shares for $7.75 per share in cash. The all-cash transaction aggregated approximately $39 million.
TransDigm's indirect wholly-owned subsidiary, Buccaneer had earlier announced a cash tender offer for acquiring Aerosonic shares, which expired on Jun 4, 2013. With successful completion of this offer, 3,553,830 shares were validly tendered, which represents approximately 88.4% of the total outstanding shares.
Concurrent with this tender offer, Buccaneer also announced its intentions to utilize the top-up options, which allows it to buy additional shares of Aerosonic for a total ownership of 90%. However, this will also allow a provision for a short form merger of the two transacting parties, without the voting approval from other stockholders as per the Delaware Law.
With this merger, Buccaneer will amalgamate into Aerosonic and cease to exist as a separate entity while Aerosonic will emerge as a wholly-owned subsidiary of Transdigm, thereafter.
The acquisition is a strategic move by TransDigm as Aerosonic’s operations and products perfectly complement its existing portfolio. Through this acquisition, TransDigm will be able to leverage Aerosonic’s proprietary air data and display technologies with the help of its broad market presence and financial strength, thereby enhancing its growth prospects.
Apart from product line synergies, with Aerosonic on board, TransDigm will further strengthen its relations with its important customers like the U.S. government and Boeing.
TransDigm currently has a Zacks Rank #3 (Hold). Two other companies operating in the same industry and worth considering at the moment are Kratos Defense & Security Solutions, Inc. (KTOS) and Astronics Corporation (ATRO), both with a Zacks Rank #1 (Strong Buy)
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