Report
Chris Higgins
EUR 100.00 For Business Accounts Only

TransDigm's wide moat built on intangible assets and switching costs will drive excess returns.

TransDigm, manufacturer of aerospace components and spare parts, announced on Oct. 10 plans to acquire Esterline for $4 billion, including the assumption of $400 million of debt, in an all-cash transaction that will see TransDigm raise significant funding via new term loans. TransDigm shares are off about 3% and Esterline's have soared 30%. According to our estimates, the deal price represents 12.5 times Esterline's 2019 consensus EBITDA, whereas peers are trading at an average enterprise value/...
Underlying
TransDigm Group Incorporated

TransDigm Group is a holding company. Through its subsidiaries, the company designs, produces and supplies aircraft components for use on commercial and military aircraft. The company's segments are: Power and Control, which develops, produces and markets systems and components that provide power to or control power of the aircraft utilizing electronic, fluid, power and mechanical motion control technologies; Airframe, which develops, produces and markets systems and components that are used in non-power airframe applications utilizing airframe and cabin structure technologies; and Non-aviation, which develops, produces and markets products for non-aviation markets.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
Chris Higgins

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