TransDigm Group Incorporated (NYSE: TDG) has announced it has entered into a definitive agreement to purchase all outstanding share of common stock of Esterline for USD 122.50 per share in cash, representing a total transaction value of approximately USD 4.0 billion including the assumption of debt, the company said.
The acquisition will be financed through a combination of existing cash on hand of approximately $2 billion and the incurrence of new term loans. TransDigm has obtained commitments for the full amount of financing required for the transaction.
TransDigm expects the acquisition to be financed primarily through cash on hand and the incurrence of new term loans, and currently anticipates the acquisition to be modestly accretive to TransDigm´s adjusted earnings per share within the first year of ownership.
The acquisition of Esterline expands TransDigm´s platform of proprietary and sole source content for the aerospace and defense industries, including significant aftermarket exposure.
Headquartered in Bellevue, Washington, Esterline is an industry leader in specialized manufacturing for these sectors with anticipated fiscal year 2018 revenue of approximately $2.0 billion. The company consists of 28 business units organized across eight platforms to deliver specialty aerospace, defense and industrial products. The company employs over 12,500 employees in more than 50 operating locations throughout the world.
Morgan Stanley & Co. LLC acted as financial advisor to TransDigm. Wachtell, Lipton, Rosen & Katz and Baker & Hostetler LLP acted as TransDigm´s lead legal counsel. Goldman Sachs & Co. LLC acted as financial advisor to Esterline and Evercore Group L.L.C. served as advisor to Esterline´s Board of Directors. Skadden, Arps, Slate, Meagher & Flom served as legal counsel to Esterline.
TransDigm Group Incorporated, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today.