TransDigm Declares Special Dividend

TransDigm (NYSE: TDG  ) is rewarding its shareholders mightily with an extraordinary payout. The company has declared a special dividend of $22.00 per share, which will be paid on July 25 to shareholders of record as of July 15.

The company is not usually a dividend payer, instead handing out the occasional disbursement in the form of a special distribution. Before this, its last payout was also a special dividend, amounting to $12.85 per share and paid last November.

TransDigm has strengthened its cash position significantly of late. Concurrent with the announcement of the extraordinary payout, the company said it had secured a fresh incremental term loan of $900 million at a rate of 3.8% and completed a $500 million issue of 7.5% senior subordinated notes maturing in 2021.

The new special dividend yields 14.3% at TransDigm's current stock price of $153.70.

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  • Report this Comment On July 05, 2013, at 4:59 PM, tms9054 wrote:

    Can someone please explain to me how this works?

    Let's say I bought 400 shares right now (@ $158) on 7/5. That is an investment of $63,200.

    From all that I can tell, that would qualify me for the dividend (at least 3 business days before the record date of 7/15).

    Can I sell on 7/16 or 7/26 and collect the dividend (of $8,800)?

  • Report this Comment On July 05, 2013, at 5:17 PM, TMFKris wrote:

    @tms9054: Here is the company's investor relations info to contact them directly:

    Investor Relations

    TransDigm Group Incorporated

    The Tower at Erieview

    1301 East 9th St.

    Suite 3000

    Cleveland, OH 44114



  • Report this Comment On July 05, 2013, at 5:36 PM, tms9054 wrote:

    I appreciate you pointing me in that direction but it seems like a straight-forward situation...?

    Is there anyone out there that can shed some insight into this?

  • Report this Comment On July 05, 2013, at 8:47 PM, tms9054 wrote:

    Answer is special dividend decreases share price by the same amount...

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Eric Volkman

Eric has been writing about stocks and finance since the mid-1990s, when he lived in Prague, Czech Republic. Over the course of a varied career, he has also been a radio newscaster, an investment banker, and a bass player in a selection of rock and roll bands. A native New Yorker, he currently lives in Los Angeles.

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