Summary
TransDigm Group Incorporated (TDG) filed an 8-K on May 20, 2014, to disclose its intention to offer $2.350 billion in senior subordinated notes. These notes will be issued by its wholly-owned subsidiary, TransDigm Inc., through a private placement under Rule 144A and Regulation S. The primary purpose of this offering, along with additional term loans and securitization proceeds, is to fund a significant dividend to shareholders, estimated between $900 million and $1.5 billion. The funds will also be used for dividend equivalent payments, to repurchase outstanding 7.75% Senior Subordinated Notes due 2018 via a tender offer, and for related transaction expenses and general corporate purposes.
Key Highlights
- 1Announces proposed offering of $2.350 billion in senior subordinated notes by TransDigm Inc.
- 2Offering is structured as a private placement under Rule 144A and Regulation S.
- 3A significant portion of the proceeds will fund a substantial dividend to common stockholders ($900 million to $1.5 billion).
- 4Intends to use funds to repurchase outstanding 7.75% Senior Subordinated Notes due 2018 through a tender offer.
- 5The offering is being supported by additional term loans and proceeds from a trade receivables securitization facility.
- 6Funds will also cover dividend equivalent payments and general corporate purposes.
- 7This 8-K primarily serves to disclose the offering details via an attached press release.
Frequently Asked Questions
The primary purpose is to fund a large dividend to TransDigm Group's common stockholders, estimated between $900 million and $1.5 billion. Additionally, the proceeds will be used for dividend equivalent payments, repurchasing existing 7.75% Senior Subordinated Notes due 2018, and for general corporate purposes and transaction fees.
The notes will be offered by TransDigm Inc., a wholly-owned subsidiary, through a private placement under Rule 144A and Regulation S of the Securities Act of 1933. This means they are not being publicly registered and are intended for qualified institutional buyers and non-U.S. persons.
Yes, a portion of the proceeds from the new note offering and other financing activities will be used to repurchase any and all outstanding 7.75% Senior Subordinated Notes due 2018 through a tender offer, and to redeem any notes remaining after the tender offer.
TransDigm Group is also utilizing proceeds from an additional tranche of term loans under its senior secured credit facilities and borrowing under its trade receivables securitization facility to support the planned dividend and note repurchase activities.