Summary
TransDigm Group Incorporated (TDG) announced a significant acquisition through a definitive agreement to merge with Aviation Technologies Inc. (ATI) for approximately $430 million in cash. This strategic move, expected to close in the second quarter of fiscal 2007, aligns with TransDigm's established acquisition strategy by incorporating ATI's two primary operating units, Avtech and ADS/Transicoil. These units service the commercial and military aerospace markets with proprietary products, high aftermarket content, and strong platform positions, fitting well within TransDigm's business model. The acquisition of ATI, primarily owned by Odyssey Investment Partners (an early investor in TransDigm), involved a special committee of disinterested directors for review due to the indirect co-investment of TransDigm's CEO, W. Nicholas Howley, and director Douglas Peacock in ATI. Both executives recused themselves from the board's approval vote, underscoring a commitment to corporate governance. TransDigm will host an investor call to discuss this transaction.
Key Highlights
- 1TransDigm Group Inc. is acquiring Aviation Technologies Inc. (ATI) for approximately $430 million in cash.
- 2The acquisition is expected to close in the second quarter of fiscal year 2007.
- 3ATI's businesses, Avtech and ADS/Transicoil, operate in commercial and military aerospace markets, offering proprietary products and high aftermarket content.
- 4The acquisition aligns with TransDigm's proven strategy of acquiring businesses that fit its business model and acquisition criteria.
- 5A special committee of independent directors reviewed and recommended the acquisition due to potential conflicts of interest involving TransDigm's CEO and a director who were also involved with ATI.
- 6TransDigm's CEO and a director abstained from the board's vote approving the transaction.
- 7The company has scheduled an investor conference call for January 10, 2007, to discuss the acquisition.