TransDigm Announces Acquisition of Raptor Scientific
TransDigm Group (NYSE: TDG) has agreed to acquire Raptor Scientific, a subsidiary of L Squared Capital Partners, for $655 million in cash, including tax benefits. Raptor Scientific manufactures complex test and measurement solutions for the aerospace and defense sectors. The acquisition is expected to generate around $90 million in revenue for the year ending December 31, 2024. Raptor Scientific employs about 170 people and operates in multiple locations across the United States. TransDigm's CEO, Kevin Stein, expressed that the acquisition aligns with their value generation strategy and is expected to meet long-term equity return objectives. The deal is pending regulatory approvals and is to be financed with existing cash.
- TransDigm is acquiring Raptor Scientific for an agreed price of $655 million, indicating potential strategic investment.
- Raptor Scientific is expected to generate approximately $90 million in revenue for the calendar year ending December 31, 2024, showing a solid revenue stream.
- The acquisition aligns with TransDigm's value generation strategy, which may enhance shareholder value.
- Raptor Scientific's strong reputation and proprietary products in aerospace and defense could provide a competitive edge.
- The deal will be financed through existing cash on hand, avoiding additional debt.
- The acquisition is subject to regulatory approval, which could delay or prevent the closing of the deal.
- The $655 million expenditure, despite including tax benefits, is a significant cash outflow that can impact liquidity.
Insights
The acquisition of Raptor Scientific by TransDigm for
This deal could enhance TransDigm's revenue streams and profitability over time, supporting its long-term equity value creation goals. However, investors should consider the integration risks and potential regulatory hurdles. Overall, the acquisition aligns with industry trends of consolidating capabilities in high-value, high-margin segments.
Raptor Scientific's expertise in test and measurement solutions for aerospace and defense markets is a strategic fit for TransDigm's portfolio. With manufacturing locations across the United States, Raptor Scientific's products are important for a wide range of aircraft platforms, indicating a strong aftermarket service potential. This acquisition will likely strengthen TransDigm's market position and enhance its ability to serve a broader range of customers with sophisticated engineering solutions.
The proprietary nature of Raptor Scientific’s products means TransDigm is acquiring a company with a unique market position and established customer base, which can result in a more stable and recurring revenue stream. Nevertheless, the success of this acquisition will depend on effective integration and maintaining the quality and reliability that Raptor Scientific is known for.
Raptor Scientific is a leading global manufacturer of complex test and measurement solutions primarily serving the aerospace and defense end markets. The Company's products are highly engineered, proprietary components with significant aftermarket content and a strong presence across major aerospace and defense platforms. Nearly all of Raptor Scientific's revenue is generated from proprietary products. The Company is expected to generate approximately
Kevin Stein, TransDigm's President and Chief Executive Officer, stated, "We are excited about the acquisition of Raptor Scientific. The Company's comprehensive proprietary and highly engineered product portfolio of aerospace and defense testing and instrumentation solutions fits well with our value generation strategy. Raptor Scientific's test and measurement solutions are used on a diverse range of new and existing aircraft platforms, and the Company has an outstanding reputation with its customers. As with all TransDigm acquisitions, we expect this acquisition to create equity value in-line with our long-term private equity-like return objectives."
The acquisition is subject to regulatory approvals in
About TransDigm Group
TransDigm Group, 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. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, engineered audio, radio and antenna systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems and specialized flight, wind tunnel and jet engine testing services and equipment.
Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate," or "continue" and other words and terms of similar meaning may identify forward-looking statements. All forward-looking statements involve risks and uncertainties that could cause TransDigm Group's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; supply chain constraints; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; failure to complete or successfully integrate acquisitions; our indebtedness; current and future geopolitical or other worldwide events, including, without limitation, wars or conflicts and public health crises; cybersecurity threats; risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; our reliance on certain customers;
Contact:
Investor Relations
(216) 706-2945
ir@transdigm.com
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SOURCE TransDigm Group Inc.
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