Cleveland-based TransDigm Group Inc. has purchased Aero-Instruments Co., LLC for approximately $35 million, in cash. Aero, also located in Cleveland, produces proprietary engineered components for aerospace systems.
Aero designs and manufactures air data sensors, including pitot probes, pitot-static probes, static pressure ports, angle of attack, temperature sensors and flight test equipment for use primarily in the business jet and helicopter markets. Most of its revenue is derived from the aftermarket. About 20% of its revenues are from military contracts.
TransDigm is a holding company for numerous wholly owned subsidiaries that produce engineered aircraft components. Its products are in place on most commercial and military aircraft now in service.
Major product offerings include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seatbelts and safety restraints, engineered interior surfaces and lighting and control technology.
This is the second significant acquisition for Transdigm this year. Earlier it acquired AmSafe Global Holdings Inc, a producer of passenger seatbelts and airbags. It paid $750 million in cash to Berkshire Partners LLC and Greenbriar Equity Group LLC.
Speaking of Transdigm on the occasion of the AmSafe purchase, Michael Callahan, senior equity analyst at Auriga USA, told Investors Business Daily: "Management does an outstanding job of squeezing profits from acquired businesses. They buy up aircraft components suppliers who have a sole-source position on major OEM platforms, therefore having control over the aftermarket supply chain over the course of the next 30 years as that plane is in service. That gives them a tremendous amount of pricing power, and that's what they've done very well for the past 20 years or so."
