TransDigm Group plans to buy Esterline Technologies in $4 billion deal

October 10, 2018

TransDigm Group plans to buy Esterline Technologies in $4 billion deal

CLEVELAND, Ohio - TransDigm Group Inc. announced today a deal to buy aerospace and defense industry supplier Esterline Technologies Corp. for about $4 billion, including debt.

TransDigm said the deal will be financed through a combination of cash on hand and new term loans of about $2 billion.

Under terms of the deal, TransDigm will pay $122.50 in cash for each Esterline share outstanding, representing a 38 percent premium to Tuesday’s closing price, and implying a market capitalization of $3.61 billion.

The transaction has been approved by the boards of directors of both companies. The companies expect to complete the transaction in the second half of 2019.

“We are pleased to have reached agreement to acquire a collection of businesses that fit well with our focused and consistent strategy,”  W. Nicholas Howley, TransDigm’s executive chairman, said in a statement.

“Esterline’s core aerospace and defense business consists of primarily proprietary, sole source products with significant and growing aftermarket exposure. We view this as highly complementary to our existing business. We are confident that the combination of Esterline’s leading positions and our proven track record of driving performance will enable us to deliver the private equity-like returns our investors have come to expect from this investment,” Howley said.

TransDigm president and CEO Kevin Stein said that upon completion of the acquisition, Bob Henderson, TransDigm’s current vice chairman, “will oversee the integration and operations of Esterline.”

Headquartered in Bellevue, Washington, Esterline has 28 business units across eight platforms that deliver specialty aerospace, defense and industrial products. The company employs more than 12,500 employees in more than 50 operating locations throughout the world.

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