Author Topic: TDG - Transdigm  (Read 138530 times)

Liberty

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walkie518

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Re: TDG - Transdigm
« Reply #371 on: February 19, 2018, 10:05:24 AM »

Liberty

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Re: TDG - Transdigm
« Reply #372 on: February 19, 2018, 10:18:27 AM »
https://www.bloomberg.com/news/features/2018-02-14/boeing-is-killing-it-by-squeezing-its-suppliers

this kind of behavior will spur a wave of consolidation among suppliers?

It already has:

Quote
This, along with the ceaseless price squeezing (from Airbus as well as Boeing), has set off a wave of acquisitions as suppliers try to build leverage. Last April, Rockwell Collins Inc., which makes aircraft electronics, paid $8.6 billion for B/E Aerospace Inc., a supplier of cabin equipment including seats and lavatories. Just after the deal closed, Gregory Hayes, CEO of United Technologies, called his counterpart at Rockwell Collins, Kelly Ortberg, with a proposal. “I said, ‘Kelly, we need to do something,’ ” Hayes recalls. “ ‘The forces of nature in the aerospace business are such that we need to figure out how we’re going to reduce costs.’ ”
In September, UTC agreed to pay $23 billion for Rockwell Collins—weeks after Boeing set up a unit called Boeing Avionics to make its own cockpit equipment.

btw, I posted this in the TDG thread because there's no BA thread, but I don't mean to imply anything about the impact on TDG.
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Leverage Capabilities

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Re: TDG - Transdigm
« Reply #373 on: February 21, 2018, 04:03:58 PM »
I think i remember a chart from one of their presentations where like ~75% of EBITDA As Defined comes from the aftermarket. My biggest concern based on the article would be if Boeing / Airbus start getting more and more into the aftermarket

Liberty

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Re: TDG - Transdigm
« Reply #374 on: February 22, 2018, 04:42:57 AM »
I think i remember a chart from one of their presentations where like ~75% of EBITDA As Defined comes from the aftermarket. My biggest concern based on the article would be if Boeing / Airbus start getting more and more into the aftermarket

Indeed. The article says that's one of their goals, but we'll have to see how effective they are at it, and whether they target specific sole-source parts that TDG has.
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Sharad

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Re: TDG - Transdigm
« Reply #375 on: February 22, 2018, 08:06:28 AM »
I think i remember a chart from one of their presentations where like ~75% of EBITDA As Defined comes from the aftermarket. My biggest concern based on the article would be if Boeing / Airbus start getting more and more into the aftermarket

When a company moves out of its core competency, most of the time, bad things happen. I know BA would look like they would do well with acquisitions of aftermarket parts suppliers, but what looks logical in theory could be an epic failure in practice. Home Depot attempted to step into FAST's space, and had to spin off HD Supply after it failed to make money. I'd think BA entering the market could longer term prove to be a bullish thing for TDG, if you think about how difficult it is to master valuation, efficient merging, creating synergies and matching corporate cultures. I don't recall BA being a major acquirer in the past, so is it in their DNA? If not, any potential investment in the aftermarket space could present a great opportunity for TDG, especially if shares fell in sympathy.
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Leverage Capabilities

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Re: TDG - Transdigm
« Reply #376 on: February 22, 2018, 03:34:57 PM »
I think i remember a chart from one of their presentations where like ~75% of EBITDA As Defined comes from the aftermarket. My biggest concern based on the article would be if Boeing / Airbus start getting more and more into the aftermarket

When a company moves out of its core competency, most of the time, bad things happen. I know BA would look like they would do well with acquisitions of aftermarket parts suppliers, but what looks logical in theory could be an epic failure in practice. Home Depot attempted to step into FAST's space, and had to spin off HD Supply after it failed to make money. I'd think BA entering the market could longer term prove to be a bullish thing for TDG, if you think about how difficult it is to master valuation, efficient merging, creating synergies and matching corporate cultures. I don't recall BA being a major acquirer in the past, so is it in their DNA? If not, any potential investment in the aftermarket space could present a great opportunity for TDG, especially if shares fell in sympathy.

Totally agree. I'd also guess that Airbus, Bombardier, etc. would no longer purchase parts from a now BA-owned suppler. If these companies compete against TDG, that would give TDG even more pricing power for these other OEMs.

Jerry Capital

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Re: TDG - Transdigm
« Reply #377 on: March 19, 2018, 11:52:10 AM »
TransDigm Group Incorporated (NYSE: TDG) announced today that it has entered into a definitive agreement to acquire Extant Components Group Holdings, Inc. ("Extant"), a portfolio company of Warburg Pincus LLC, for approximately $525 million. TransDigm expects to finance the acquisition primarily through a combination of cash on hand and existing availability under its revolving credit facility.

Extant expects to derive 80% of its revenue from the aftermarket, with nearly all of the revenue from proprietary and sole source products. The revenue is derived from a mix of military and commercial applications, with the majority of the revenue coming from the military end market

https://www.prnewswire.com/news-releases/transdigm-to-acquire-extant-aerospace-300615835.html
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Liberty

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Re: TDG - Transdigm
« Reply #378 on: April 30, 2018, 02:43:35 PM »
Howley chairman, Stein new CEO:

https://www.transdigm.com/investor-relations/news-releases/news-article/?myartid=2345699

That was quicker than I expected.
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Liberty

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