Summary
TransDigm Group Inc. (TDG) filed an 8-K on October 10, 2012, announcing a proposed offering of $500 million in senior subordinated notes due 2020. This offering, conducted through its wholly-owned subsidiary TransDigm Inc. via a private placement under Rule 144A and Regulation S, aims to raise capital for a significant dividend distribution to common stockholders, ranging from $450 million to $850 million. The proceeds will also cover transaction expenses and general corporate purposes, supplemented by $150 million in additional incremental term loans and existing cash. The filing also provides an update on the company's business and financial position as of September 30, 2012. Management estimates that approximately 55% of net sales are derived from the aftermarket, with the remaining 45% from original equipment manufacturers (OEMs). The company anticipates holding approximately $440 million in cash and cash equivalents, with an undrawn revolving credit facility of up to $310 million, providing substantial liquidity.
Key Highlights
- 1Proposed offering of $500 million in senior subordinated notes due 2020 by TransDigm Inc.
- 2Offering is a private placement under Rule 144A and Regulation S.
- 3Proceeds intended to fund a significant dividend to common stockholders, estimated between $450 million and $850 million.
- 4Additional funding through $150 million in incremental term loans and cash on hand.
- 5Estimated 55% of net sales derived from the aftermarket as of September 30, 2012.
- 6Estimated 45% of net sales derived from sales to original equipment manufacturers (OEMs).
- 7Anticipated cash and cash equivalents of approximately $440 million as of September 30, 2012.
- 8Undrawn revolving credit facility availability of up to $303 million as of September 30, 2012.