Summary
TransDigm Group Inc. (TDG) has filed an 8-K report on November 30, 2010, primarily to disclose information related to a proposed offering of $780 million in senior subordinated notes due 2018. These notes are being offered by its wholly-owned subsidiary, TransDigm Inc., through a private placement. The primary purpose of this financing is to fund the significant acquisition of McKechnie Aerospace Holdings, Inc., which was previously announced and is valued at approximately $1.265 billion. The report provides detailed pro forma financial information combining TransDigm and McKechnie, highlighting the expected scale of the combined entity and its financial profile post-acquisition and financing. The filing also provides an update on recent smaller acquisitions, including Semco Instruments, Inc. and the Actuation Business of Telair International Inc. The company emphasizes its business strategy centered on proprietary, engineered aerospace components with significant aftermarket revenue potential, and its track record of growth through both organic development and strategic acquisitions. The information presented is intended to provide potential investors with a comprehensive overview of the company's financial condition and prospects in light of the proposed debt issuance and major acquisition.
Key Highlights
- 1Proposed offering of $780 million in senior subordinated notes due 2018 by TransDigm Inc. to finance the acquisition of McKechnie Aerospace Holdings, Inc.
- 2McKechnie Aerospace Holdings, Inc. acquisition valued at approximately $1.265 billion.
- 3Pro forma combined net sales of $1,164.8 million and EBITDA As Defined of $521.7 million for the twelve-month period ended September 30, 2010, reflecting the combined entity.
- 4TransDigm recently acquired Semco Instruments, Inc. for approximately $71.0 million and entered into an agreement to acquire the Actuation Business of Telair International Inc. for approximately $94 million.
- 5The company highlights its business model focused on proprietary aerospace components with significant aftermarket revenue (approximately 60% of FY2010 net sales).
- 6Approximately 80% of fiscal year 2010 net sales were from sole-source products, a key differentiator.
- 7The report details the financing structure for the McKechnie acquisition, including $780 million in notes and a new $900 million senior secured credit facility.