CLEVELAND, Feb. 23, 2015 /PRNewswire/ -- TransDigm Group
Incorporated (NYSE: TDG) announced today a definitive agreement to
purchase the Telair Cargo Group of businesses ("Telair"), a global
leader in aerospace on-board cargo loading and handling, restraint
systems and unit load devices from AAR CORP. (NYSE: AIR), for a
total purchase price of approximately $725
million in cash, subject to adjustment. TransDigm expects to
finance the acquisition through existing cash on hand and possible
use of its existing revolving credit facility.
Telair revenues are anticipated to be about $300 million with EBITDA margins approaching 20%
for fiscal year ending May 2015. Over
80% of revenues are from the commercial aerospace market with the
balance from the military aerospace market. Approximately 45%
of revenues come from the aftermarket, primarily commercial
transport and cargo aircraft. Approximately 95% of the revenues are
from proprietary products with about 80% sold on a sole source
basis. The business consists of three major operating units, Telair
International GmbH ("Telair Europe"), Nordisk Aviation Products, AS
("Nordisk") and AAR Cargo Systems ("Telair US"). The business
employs just over 600 employees in its various locations
worldwide.
Telair Europe, the largest operating unit in Telair and
headquartered in Miesbach, Germany, accounts for approximately 60% of the
revenues and a higher percentage of the profits. Telair Europe
is a market leader in the design, manufacture and support of
complete on-board baggage and cargo loading and handling systems
for wide-body and narrow-body aircraft worldwide. Since its
inception, it has developed long-standing relationships with Airbus
and Boeing, resulting in a substantial installed base of systems
worldwide as well as positions on a broad range of new and existing
aircraft. Major platforms include the A320 family, A330/A340,
A350, B747-8 I/F, B737-6/7/8/900 and the CRJ 700/900/1000.
Nordisk, headquartered in Holmestrand, Norway, is the market leader in the design,
engineering, and manufacture of innovative and cost-effective unit
load devices. Offering lower and main deck containers, special
purpose pallets and platforms, Nordisk products are in service with
nearly every airline or dedicated freight company.
Telair US, headquartered in Goldsboro,
North Carolina, is also a supplier, designer and
manufacturer of in-aircraft cargo loading systems and components
for a variety of commercial and military platforms including
passenger to freighter conversions. Major platforms include
the A400M, B767F and XC-2, as well as A300 modifications.
"This is another sizable acquisition opportunity that meets our
strategic, operational and value-creation criteria," stated
W. Nicholas Howley, TransDigm's
Chairman and Chief Executive Officer. "We are pleased with the
opportunity to acquire a business of this size that so closely
meets our business model. Telair has built a leading worldwide
positon in cargo handling equipment and related aftermarket. The
products are primarily highly engineered and proprietary. The
business has a significant and growing aftermarket. They have
continually invested in new platforms and are positioned for growth
as the commercial aerospace and cargo markets continue to
expand."
Mr. Howley continued, "We anticipate that the revenue run rate
will be relatively flat for the first 12 to 18 months due to
significant A400M shipments in fiscal year 2015 that will not fully
repeat in fiscal year 2016. This should be offset by growth in
other areas in fiscal 2016. The ramp up in A350 shipments will
begin to contribute meaningfully beyond that. As with all of our
acquisitions, we see opportunities for private equity like value
creation for our shareholders from this transaction."
"We are confident that TransDigm's leadership will ensure a
strong future for the Telair group, its employees and customers,"
said David P. Storch, Chairman and
Chief Executive Officer of AAR. "TransDigm is a leading
global designer, producer and supplier of highly engineered
aircraft components, systems and subsystems for use on nearly all
commercial and military aircraft in service today."
The acquisition, which is expected to close within the next
sixty days, is subject to regulatory approvals and customary
closing conditions.
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, NiCad batteries and chargers, engineered
latching and locking devices, rods and locking devices, engineered
connectors and elastomers, cockpit security components and systems,
specialized cockpit displays, aircraft audio systems, specialized
lavatory components, seatbelts and safety restraints, engineered
interior surfaces, lighting and control technology and military
personnel parachutes and cargo delivery systems.
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
which could affect TransDigm Group's actual results and could cause
its 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 failure to complete or successfully integrate the
acquisition; that the acquired business does not perform in
accordance with our expectations; and other factors. Further
information regarding important factors that could cause actual
results to differ materially from projected results can be found in
TransDigm Group's Annual Report on Form 10-K and other reports that
TransDigm Group or its subsidiaries have filed with the Securities
and Exchange Commission. Except as required by law, TransDigm Group
undertakes no obligation to revise or update the forward-looking
statements contained in this press release.
Contact:
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Liza Sabol
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Investor
Relations
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(216)
706-2945
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ir@transdigm.com
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SOURCE TransDigm Group Incorporated