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.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends TransDigm Group. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.