TransDigm Announces Acquisition of the Simmonds Precision Products, Inc. Business of Goodrich Corporation from RTX Corporation
Rhea-AI Summary
TransDigm Group (NYSE: TDG) has announced a definitive agreement to acquire Simmonds Precision Products from RTX Corporation (NYSE: RTX) for $765 million in cash, including tax benefits. Simmonds, based in Vergennes, Vermont, specializes in fuel & proximity sensing and structural health monitoring solutions for aerospace and defense markets.
The acquisition target generates approximately $350 million in annual revenue, with 40% derived from aftermarket sales. Simmonds employs around 900 people and is known for its highly engineered, proprietary components with significant aftermarket content and strong presence across major aerospace and defense platforms.
The transaction aligns with TransDigm's strategy of acquiring companies with proprietary products and substantial aftermarket presence. The acquisition will be financed through existing cash on hand and is subject to regulatory approvals in the United States and customary closing conditions.
Positive
- Strategic acquisition valued at $765 million adds significant revenue potential with $350 million annual revenue
- Strong aftermarket business comprising 40% of revenue provides recurring income
- Acquisition target has proprietary technology and established positions across diverse aerospace and defense platforms
- Transaction will be funded through existing cash, indicating strong liquidity position
- Acquisition expected to meet TransDigm's private equity-like return objectives
Negative
- Transaction subject to regulatory approvals, introducing closing uncertainty
- Significant cash outlay of $765 million may impact available liquidity
News Market Reaction 1 Alert
On the day this news was published, RTX gained 0.94%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Simmonds, headquartered in
Kevin Stein, TransDigm's President and Chief Executive Officer, stated, "We are excited about the acquisition of Simmonds. The Company's highly engineered, proprietary products with substantial aftermarket content fit well with our long-standing strategy. Simmonds has established positions across a diverse range of commercial and defense platforms. The Company is an industry leader in fuel & proximity sensing and structural health monitoring technology, and we are excited to partner with Simmonds to continue investing in the business. We also look forward to working with and continuing to support Simmonds' commercial and defense customers. As with all TransDigm acquisitions, we expect this acquisition to create equity value in-line with our long-term private equity-like return objectives."
The acquisition is subject to regulatory approvals in
About TransDigm Group
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems, specialized flight, wind tunnel and jet engine testing services and equipment, electronic components used in the generation, amplification, transmission and reception of microwave signals, and complex testing and instrumentation solutions.
Forward-Looking Statements
All forward-looking statements involve risks and uncertainties that could cause TransDigm Group's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; supply chain constraints; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; failure to complete or successfully integrate acquisitions; our indebtedness; current and future geopolitical or other worldwide events, including, without limitation, wars or conflicts and public health crises; cybersecurity threats; risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; our reliance on certain customers; the United States ("
Contact:
Investor Relations
(216) 706-2945
ir@transdigm.com
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SOURCE TransDigm Group Inc.
FAQ
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