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TransDigm Buying GE Aviation Unit

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Cleveland-based TransDigm Group (NYSE: TDG  ) is buying a piece of GE.

On Friday, as trading wound down for the week, TransDigm announced a deal to buy the Electromechanical Actuation Division of General Electric (NYSE: GE  ) Aviation for $150 million, cash. The business, which makes proprietary, highly engineered aerospace electromechanical motion control subsystems for civil and military applications, counts all three of the world's biggest airplane manufacturers -- Boeing, Airbus, and Brazil's Embraer -- among its clients, and Sikorsky and General Atomics, as well, on the military side.

Annual revenues at the unit approximate $80 million, which puts about a 1.9 price-to-sales valuation on the transaction -- a significant discount to the 4.5 P/S ratio of TransDigm's own shares.

TransDigm intends to close the acquisition toward the end of Q3 2013, at which time it will rename the unit Whippany Actuation Systems, LLC. 


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Rich Smith
TMFDitty

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

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Related Tickers

7/29/2015 4:00 PM
GE $26.26 Up +0.16 +0.61%
General Electric C… CAPS Rating: ****
TDG $221.02 Up +3.96 +1.82%
TransDigm Group CAPS Rating: *****

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