TransDigm Group (NYSE:TDG) | Acquisitions & Divestitures

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Acquisitions



TransDigm Group selectively pursues the acquisition of proprietary aerospace component businesses. The aerospace industry, in particular, remains highly fragmented, with many of the companies in the industry being small private businesses or small non-core operations of larger businesses. TransDigm Group has significant experience among its management team in executing acquisitions and integrating acquired businesses. As of October 2014, TransDigm Group has successfully acquired 49 businesses and/or product lines since its formation in 1993. Many of these acquisitions have been integrated into existing TransDigm production facilities, which enables a higher production capacity utilization, which in turn improves gross profit levels due to the ability to spread fixed manufacturing overhead costs over higher production volume.

Significant acquisitions made by TransDigm Group in the fiscal years 2011 to 2014 are discussed in the following.



Elektro-Metall Export GmbH


On March 6, 2014, TransDigm Germany GmbH, a newly formed subsidiary of TransDigm Inc., acquired Elektro-Metall Export GmbH for approximately $49.6 million, which comprises $40.4 million in cash plus the assumption of approximately $9.2 million of net indebtedness. Elektro-Metall Export GmbH manufactures proprietary, highly engineered aerospace electromechanical actuators, electrical and electromechanical components and assemblies for commercial aircraft, helicopters and other specialty applications. These products fit well with TransDigm Group's overall business direction. Elektro-Metall Export GmbH is included in TransDigm's Power & Control segment.



Airborne Global Inc.


On December 19, 2013, TransDigm Inc. acquired all of the outstanding stock of Airborne Global Inc. for approximately $264.2 million in cash. Airborne Global is the leading designer and manufacturer of personnel parachutes, cargo aerial delivery systems, emergency escape systems, naval decoys and other related products. These products fit well with TransDigm's overall business direction. Airborne Global is included in TransDigm's Airframe segment.



Assets from GE Aviation's Electromechanical Actuation Division


On June 28, 2013, Whippany Actuation Systems, LLC, a newly formed subsidiary of TransDigm Inc., acquired assets from GE Aviation's Electromechanical Actuation Division for approximately $151.5 million in cash. Whippany Actuation manufactures proprietary, highly engineered aerospace electromechanical motion control subsystems for civil and military applications, with product offerings including control electronics, motors, high power mechanical transmissions and actuators. These products fit well with TransDigm Group's overall business direction. Whippany is included in TransDigm's Power & Control segment.



Arkwin Industries, Inc.


On June 5, 2013, TransDigm Inc. acquired all of the outstanding stock of Arkwin Industries, Inc. (Arkwin), for approximately $285.7 million in cash. Arkwin manufactures proprietary, highly engineered aerospace hydraulic and fuel system components for commercial and military aircraft, helicopters and other specialty applications. Arkwin is included in TransDigm's Power & Control segment.



Aerosonic, LLC


On June 5, 2013, Buccaneer Acquisition Sub (Buccaneer), a newly formed subsidiary of TransDigm Group, completed the tender offer of a majority of the outstanding stock of Aerosonic Corporation (Aerosonic). Buccaneer was subsequently merged into Aerosonic on June 10, 2013; in connection therewith, all outstanding shares of Aerosonic were cancelled and Aerosonic became a wholly owned subsidiary of TransDigm Group. The aggregate price paid in the tender offer and merger was approximately $39.8 million in cash. Aerosonic designs and manufactures proprietary, highly engineered mechanical and digital altimeters, airspeed indicators, rate of climb indicators, microprocessor controlled air data test sets, angle of attack stall warning systems, integrated air data sensors and other aircraft sensors, monitoring systems and flight instrumentation for use on commercial and military aircraft. Aerosonic is included in TransDigm's Airframe segment.



Aero-Instruments Co., LLC


On September 17, 2012, TransDigm Group acquired all of the outstanding equity interests in Aero-Instruments Co., LLC (Aero-Instruments), for approximately $34.6 million in cash. Aero-Instruments designs and manufactures highly engineered air data sensors including pitot probes, pitot-static probes, static pressure ports, angle of attack, temperature sensors and flight test equipment for use primarily in the business jet and helicopter markets. Aero-Instruments has since been merged into AeroControlex Group and is included in TransDigm's Power & Control segment.



AmSafe Global Holdings, Inc.


On February 15, 2012, TransDigm Group acquired all of the outstanding stock of AmSafe Global Holdings, Inc. (AmSafe), for approximately $749.7 million in cash. AmSafe is a leading supplier of innovative, highly engineered and proprietary safety and restraint equipment used primarily in the global aerospace industry. The majority of AmSafe product lines are included in TransDigm's Airframe segment, and the remaining product lines are included in the Non-aviation segment. The distribution business acquired as part of AmSafe was sold on August 16, 2012 for approximately $17.8 million in cash. The equity investment in C-Safe LLC acquired as part of AmSafe was sold in October 2012 for approximately $16.4 million, which consisted of $5.0 million in cash at closing and an $11.4 million short-term note receivable, which was subsequently received in installments during fiscal 2013.



Harco Laboratories, Incorporated


On December 9, 2011, TransDigm Group acquired all of the outstanding stock of Harco Laboratories, Inc. (Harco), for approximately $83.3 million in cash. Harco designs and manufactures highly engineered thermocouples, sensors, engine cable assemblies and related products for commercial aircraft. Harco is included in TransDigm's Power & Control segment.



Schneller Holdings LLC


On August 31, 2011, TransDigm Group acquired all of the outstanding equity interests in Schneller Holdings LLC (Schneller) for approximately $288.6 million in cash. Schneller designs and manufactures proprietary, highly engineered laminates, thermoplastics, and non-textile flooring for use primarily on side walls, lavatories, galleys, bulkheads and cabin floors for commercial aircraft. Schneller is included in TransDigm's Airframe segment.



Talley Actuation


On December 31, 2010, AeroControlex Group, Inc., a wholly owned subsidiary of TransDigm Group, acquired the actuation business of Telair International Inc. (Talley Actuation), a wholly-owned subsidiary of Teleflex Incorporated, for approximately $93.6 million in cash. Talley Actuation manufactures proprietary, highly engineered electro-mechanical products and other components for commercial and military aircraft. Talley Actuation is included in TransDigm's Power & Control segment.



McKechnie Aerospace Holdings, Inc.


On December 6, 2010, TransDigm Group acquired all of the outstanding stock of McKechnie Aerospace Holdings Inc. (McKechnie), for approximately $1.27 billion in cash. McKechnie, through its subsidiaries, is a leading global designer, producer and supplier of aerospace components, assemblies and subsystems for commercial aircraft, regional/business jets, military fixed wing and rotorcraft. Some of the businesses acquired as part of McKechnie have since been divested (see below). Product lines of McKechnie are included in both TransDigm's Power & Control and Airframe segments.




Divestitures



Aero Quality Sales


On April 7, 2011, TransDigm Group completed the divestiture of Aero Quality Sales (AQS) to Satair A/S for approximately $31.8 million in cash. AQS, which was acquired as part of the McKechnie Aerospace acquisition, is a distributor and service center of aircraft batteries and battery support equipment.



Fastener Business


On March 9, 2011, TransDigm Group completed the divestiture of its fastener business for approximately $239.6 million in cash. This business, which was acquired as part of the McKechnie Aerospace acquisition, is made up of Valley-Todeco, Inc. and Linread Ltd. The business designs and manufactures fasteners, fastening systems and bearings for commercial, military and general aviation aircraft.

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