TransDigm acquires fellow aircraft component maker Breeze-Eastern

Posted on 30 Nov 2015 by Aiden Burgess

TransDigm Group has reached a definitive merger agreement with Breeze-Eastern for the New Jersey-based aircraft parts manufacturer to become an indirect wholly-owned subsidiary of TransDigm.

The acquisition agreement is valued at $206m (£137m), and under the terms of the agreement a subsidiary of TransDigm will commence a tender offer to acquire all of the outstanding shares of Breeze-Eastern common stock for $19.61 per share in cash.

Following the purchase of Breeze-Eastern shares through the tender offer, TransDigm will complete the transaction by acquiring all remaining shares not acquired in the offer through a merger at the same price as the tender offer.

The transaction will be funded with TransDigm’s cash on hand and is not subject to any financing condition.

Under the terms of the merger agreement, both parties anticipate that TransDigm will commence a cash tender offer for all of the outstanding shares of Breeze-Eastern on or before December 3.

The merger agreement was unanimously approved by Breeze-Eastern’s Board of Directors.

Like Breeze-Eastern, TransDigm is a leading designer, producer and supplier of highly engineered aircraft components.

The acquisition of Breeze-Eastern follows TransDigm acquisition of aerospace manufacturers PneuDraulics and Pexco Aerospace earlier this year.

TransDigm Group Chairman and CEO W. Nicholas Howley has said he is pleased acquire fellow aircraft component manufacturer Breeze-Eastern  - image courtesy of Bratenahl Capital.
TransDigm Group Chairman and CEO W. Nicholas Howley has said he is pleased acquire fellow aircraft component manufacturer Breeze-Eastern – image courtesy of Bratenahl Capital.

Chairman and CEO of TransDigm, W. Nicholas Howley, said the acquisition of Breeze-Eastern would help the business future of TransDigm as the new proprietors of that company’s time-honoured products.

“Breeze- Eastern pioneered the technology for helicopter rescue hoists and cargo winches and subsequently became a leading global designer and manufacturer of highly engineered, proprietary rescue hoists, winches and cargo hooks, as well as weapons-handling systems equipment, which currently can be found on all types of military and civilian aircraft,” he said.

“Major customers include Sikorsky, Boeing, AgustaWestland, Airbus and the US government, serving such platforms as the UH-60 Blackhawk, CH-47 Chinook, Airbus A400M transport, HH-65 Dolphin and AW-139 series helicopter,

“About 75% of Breeze-Eastern’s total revenue is derived from military markets and 70% from aftermarket products, with the vast majority being from proprietary products,

“We are pleased to have an agreement to acquire Breeze-Eastern given that the proprietary nature of these products, along with significant aftermarket content, fits well with our overall business strategy.”

Breeze-Eastern President and CEO, Brad Pedersen, said the company and its products would be a valuable asset for TransDigm’s future business model.

“We believe Breeze-Eastern will be an excellent addition to the TransDigm portfolio of companies, as our products, business model, strategy and focus are closely aligned,” he said.

“Being part of a larger aerospace company will allow for further growth opportunities and provide resources for Breeze-Eastern to continue developing the highly engineered life-saving products that we’re known for today,

“On account of this, we believe the transaction positions Breeze-Eastern well for the future and is good news for Breeze-Eastern’s stockholders, employees, customers and suppliers,

“We are proud of our history and accomplishments and look forward to our future together with TransDigm.”

Breeze-Eastern will solicit superior proposals from third parties during the next 40 days as part of the merger agreement process.

TransDigm will terminate its tender offer if Breeze-Eastern accepts a superior proposal and therefore terminates the merger agreement in accordance with the terms.