Aerospace and Defense Update
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TransDigm gave the strongest indication so far that it intends to formally bid for the British aerospace and defense group Meggitt, which has reached an agreement with a competitor of American engineers.
Kevin Stein, the chief executive of the Ohio-based aircraft parts group, said that although he could not comment in detail about the company’s plans, it was interested in buying “quality assets in the aerospace sector.”
“We don’t do rash things. We take aerospace and aerospace seriously and turn good companies into great companies,” he said.
These comments are Stein’s first public speech since then It was revealed by Meggitt Last week, TransDigm took the initiative to put forward an initial quotation of 900p, which is 100p higher than the agreed quotation of rival US group Parker Hannifin.
The British Takeovers Commission set the deadline for TransDigm’s formal bidding or withdrawal on Monday as September 14.
TransDigm’s interest has raised concerns in some respects, and the American group unapologeticly talks about its ambitions to provide investors with “private equity returns” and may split Meggitt.
In a 2019 report by the U.S. Department of Defense Inspector General, it was found that the company’s business practices were also under scrutiny in the United States. Overcharging taxpayers Some contracts from January 2015 to January 2017.
As we all know, the British government is paying attention to a large number of acquisition offers in the current defense sector, including the acquisition of Ultra Electronics by Cobham, a private equity firm.
Meggitt has promoted the sale of shares to Parker Hannifin, set a shareholder vote date on September 21, and asked the American company to make a series of commitments to protect local employment and investment.
Stan defended TransDigm’s business model, insisting that the company is the long-term owner of the aerospace business. He declined to comment on whether TransDigm is prepared to make similar promises in the context of the Meggitt bid, but emphasized that the company is a “long-term investor in the UK.” ..[that] Understand the conditions required for success”.
Since the emergence of TransDigm’s interest, Meggitt’s stock price has been trading above 800p, which shows that the market believes that the US group will make a firm offer. They closed at just under 820 pence on Tuesday.
TransDigm has been operating in the UK since 2012 and has 2,000 employees in nine locations. In January of this year, it acquired Cobham’s radio and antenna business for less than $1 billion. Stein stated that TransDigm intends to “triple the capital investment” for this business.
He said that during the acquisition of Cobham, he had talked with the British Secretary of Commerce Kwasi Kwarteng and told him that “we will send him a letter and we will make any necessary commitments.”
However, Stein acknowledged that the commitments in the letter are not legally binding, but added: “I understand the government in these requests. We are long-term buyers in the UK market and we understand the need to continue to invest in the Ministry of Defence, the Ministry of Home Affairs plan and Project to maintain the country’s defense capabilities.”
Stein also defended TransDigm’s relationship with the US government. The company paid $16.1 million to the government after the incident. Report of the inspector general of the ministry of defense, But pointed out that it complied with all laws.
“You don’t want one of your biggest customers to be dissatisfied with you. This is voluntary. We want to show the government that we want to help,” Stein said.