Aerospace component manufacturer Triumph Group (TGI +0.00%) has agreed to be acquired by private equity at a substantial premium to Friday's closing price.
The stock is jumping as a result, with shares up 35% as of 10:15 a.m. ET.
A long restructuring journey
Triumph investors have flown through a lot of turbulence over the past decade. Triumph had attempted to use acquisitions to diversify its business making structures and components for commercial aerospace and defense platforms, but the deals were costly and many of the units acquired did not live up to expectations on profitability.
The company has spent recent years selling assets, restructuring its operations, and paying off debt, putting it in a healthier position.
On Monday, Triumph announced a deal to be acquired by private equity giants Warburg Pincus and Berkshire Partners for about $3 billion. Terms of the deal offer Triumph shareholders $26 per share in cash, a premium of 38% to Friday's close and 123% above Triumph's closing price on Oct. 9, 2024, the day before media reports surfaced about a potential deal.
"We are pleased to have reached this agreement, which reflects the culmination of the board's robust process and will deliver immediate, certain and premium cash value to our shareholders," CEO Dan Crowley said in a statement. "This transaction recognizes our company's position as a valued provider of mission-critical engineered systems and proprietary components."
NYSE: TGI
Key Data Points
Is Triumph stock a buy?
Even with the premium, Triumph's stock still trades about 70% below where it did in 2014. For existing holders the deal either represents a solid return or, if nothing else, resolution, depending on how long they have held the shares.
For those who are not currently invested, there is little reason to buy in now. Triumph appears to have conducted a thorough auction, and it seems unlikely that there will be a bidding war.
