Aerospace Company TransDigm Declares Special Cash Dividend; Buys CPI's Electron Device Business For $1.385B Cash

TransDigm Group Incorporated TDG has entered into a definitive agreement to acquire the Electron Device Business of Communications & Power Industries, a portfolio company of TJC, L.P., for about $1.385 billion in cash.

CPI's Electron Device Business manufactures electronic components and subsystems primarily serving the aerospace and defense market. 

CPI's Electron Device Business generated approximately $300 million in revenue for its fiscal year ended September 30, 2023. It has manufacturing locations in Palo Alto, California; Beverly, Massachusetts; Middlesex, UK; and Woodland, California. 

"This business fits well with our long-standing strategy. The vast majority of the Company's revenues come from highly engineered, proprietary products with substantial aftermarket content," said TransDigm's President and CEO Kevin Stein.

The acquisition is expected to close by the end of TransDigm's third fiscal quarter of 2024 and will be financed through existing cash on hand as well as new long-term debt.

TransDigm held $3.47 billion in cash and equivalents as of September 30, 2023.

TDG reported fourth-quarter FY23 sales growth of 23% year-on-year to $1.852 billion, beating the analyst consensus estimate of $1.835 billion. Adjusted EPS of $8.03 beat the consensus estimate of $7.54.

TransDigm also announced that its Board of Directors has authorized a special cash dividend of $35.00 on each outstanding share of common stock and cash dividend equivalent payments under options granted under its stock options plans. The record date for the special dividend is November 20, 2023, and the payment date is November 27, 2023.

TransDigm expects fiscal 2024 net sales of $7.48 billion-$7.68 billion (consensus $7.40 billion) and Adjusted EPS of $31.00-$32.94 (consensus $31.15). 

Price Action: TDG shares closed higher by 0.27% at $895.21 on Wednesday.