Summary
TransDigm Group Inc. (TDG) announced on December 20, 2017, that it has agreed to divest its SCHROTH Safety Products business. This decision stems from an investigation by the U.S. Department of Justice concerning the acquisition of SCHROTH, which closed earlier in 2017. While TransDigm disagrees with the DOJ's position, the company has opted to settle the matter by selling the business to a management buyout group led by Perusa Partners Fund 2, L.P. The DOJ has accepted this proposed divestiture, which is now subject to court approval and customary closing conditions.
Key Highlights
- 1TransDigm to divest SCHROTH Safety Products business due to a U.S. Department of Justice investigation.
- 2The divestiture is a settlement to resolve the DOJ's concerns regarding the acquisition of SCHROTH.
- 3The buyer is a management buyout group, Perusa Partners Fund 2, L.P., along with SCHROTH managers.
- 4The Department of Justice has accepted the proposed divestiture plan.
- 5The transaction is subject to court approval and customary closing conditions.
- 6TransDigm stated it respectfully disagrees with the Department of Justice's position.
- 7The company views the settlement as a prudent decision given the deal's size, investigation costs, and the unique nature of the situation.
Frequently Asked Questions
TransDigm is selling SCHROTH as a settlement to resolve an investigation by the U.S. Department of Justice related to TransDigm's acquisition of SCHROTH earlier in 2017. Although TransDigm disagrees with the DOJ's stance, they decided to divest the business to avoid the expense and burden of further investigation.
The business is being sold to a management buyout group, which includes Perusa Partners Fund 2, L.P. (a private equity fund) as the majority shareholder, along with key managers from SCHROTH in both Germany and the U.S.
The U.S. Department of Justice has accepted the proposed divestiture. However, the transaction is still subject to court approval and other customary closing conditions and regulatory approvals before it can be finalized.
The filing mentions the 'size of the deal' as a factor in the decision to settle, suggesting SCHROTH was a material acquisition. However, specific financial details of SCHROTH's contribution to TransDigm's overall revenue or profit are not provided in this 8-K filing.