8-KRegulation FDExhibits & Filings

TransDigm Group INC 8-K Report, Regulation FD Disclosure (Mar 19, 2018)

Filed March 19, 2018For Securities:TDG

Summary

TransDigm Group (TDG) announced on March 19, 2018, a definitive agreement to acquire Extant Components Group Holdings, Inc. for approximately $525 million. This strategic acquisition is expected to be financed primarily through cash on hand and existing revolving credit facilities, indicating a strong liquidity position for TransDigm. Extant, a portfolio company of Warburg Pincus, specializes in proprietary aftermarket products and repair/overhaul services for the aerospace and defense sectors. With over 170 employees and projected fiscal year 2018 revenues of $85 million, Extant's business model of exclusively licensing or acquiring proprietary aftermarket products and supporting them throughout the aircraft's lifecycle aligns well with TransDigm's established strategy. This move is expected to further enhance TransDigm's aftermarket segment and product diversification.

Key Highlights

  • 1Acquisition of Extant Components Group Holdings, Inc. for approximately $525 million.
  • 2Extant generated approximately $85 million in revenue for the fiscal year ending September 2018.
  • 3Extant focuses on proprietary aftermarket products and repair/overhaul services in aerospace and defense.
  • 4Acquisition to be financed primarily by cash on hand and existing revolving credit facility.
  • 5Extant holds exclusive licenses or ownership of over 2,500 assemblies and sub-assemblies on more than 70 active aircraft platforms.
  • 6Disclosure of related party interests involving TransDigm directors and management with Extant and its owner, Warburg Pincus LLC.

Frequently Asked Questions

The acquisition of Extant aligns with TransDigm's core strategy of acquiring businesses with proprietary aftermarket products and services in the aerospace and defense sector. Extant's focus on supporting long-life aircraft with exclusive aftermarket products and repair services is expected to complement and enhance TransDigm's existing aftermarket business and product portfolio.

TransDigm expects to finance the acquisition primarily through a combination of its existing cash on hand and its revolving credit facility. This suggests TransDigm has sufficient liquidity to fund the transaction without significantly impacting its financial leverage.

The filing disclosed that several TransDigm directors and officers have minority interests in the Warburg Pincus LLC fund that owns Extant, or are involved in Extant's board. While these interests are noted as minority and less than 1% in some cases, investors should be aware of these related-party connections.

Extant is a provider of proprietary aftermarket products and repair/overhaul services in the aerospace and defense markets. It holds exclusive licenses or ownership of a significant number of product assemblies and sub-assemblies across numerous aircraft platforms, positioning it as a key player in specialized aftermarket support.