TransDigm Group Incorporated has acquired Esterline Technologies Corporation for approximately $4 billion (£3 billion).
The acquisition of Esterline expands TransDigm’s platform of proprietary and sole-source content for the aerospace and defence industries. Headquartered in Bellevue, Washington, Esterline is focused on specialised manufacturing for these sectors with an anticipated fiscal year 2018 revenue of approximately $2 billion.
The company consists of 28 business units organised across eight platforms to deliver speciality aerospace, defence and industrial products. Esterline employs over 12,500 employees in more than 50 operating locations throughout the world.
“We are pleased to have reached agreement to acquire a collection of businesses that fit well with our focused and consistent strategy,” stated W. Nicholas Howley, TransDigm’s Executive Chairman.
“Esterline’s core aerospace and defence business consists of primarily proprietary, sole source products with significant and growing aftermarket exposure. We view this as highly complementary to our existing business. We are confident that the combination of Esterline’s leading positions and our proven track record of driving performance will enable us to deliver the private equity-like returns our investors have come to expect from this investment.”
Curtis Reusser, Chairman, President and Chief Executive Officer of Esterline, added: “Our combination with TransDigm delivers a compelling value for our shareholders. I am pleased with the outcome of our thoughtful strategic review process, and we believe it is the best result for all Esterline stakeholders. I am very proud of the commitment and focus of our employees to serving the needs of our customers, and I am confident the combined companies will be well positioned to succeed in the global market we serve.”
The acquisition will be financed through a combination of existing cash on hand of approximately $2 billion, as well as new term loans.
The companies expect to complete the transaction in the second half of calendar 2019.