TransDigm Boosts Aftermarket Grip with $2.2 Billion Acquisition
The aerospace giant will acquire two suppliers, Jet Parts Engineering and Victor Sierra Aviation, in a cash deal that deepens its hold on the profitable commercial aftermarket.
TransDigm Group (NYSE: TDG), a heavyweight in the aerospace components industry, announced Tuesday it will acquire two suppliers, Jet Parts Engineering and Victor Sierra Aviation Holdings, for approximately $2.2 billion in an all-cash transaction. The deal significantly expands TransDigm's portfolio of proprietary, high-margin parts for the commercial aviation aftermarket, a cornerstone of its lucrative business model.
The acquired companies, both owned by private equity firm Vance Street Capital, are specialists in the aftermarket space, which involves the service, repair, and replacement of parts for aircraft currently in service. According to TransDigm, the two businesses are expected to generate combined revenues of approximately $280 million for the calendar year 2025, with nearly 100% of that income derived from the commercial aftermarket.
Shares of TransDigm rose on the news, trading up 1.75% at $1,458.64 in Tuesday's session, pushing its market capitalization over $80 billion. The disciplined acquisition aligns with the company's long-standing strategy of rolling up smaller firms that design and sell sole-source or proprietary aerospace components, which command strong pricing power and generate predictable revenue streams.
"These are well-run, profitable businesses that will fit well within TransDigm," Mike Lisman, TransDigm's Chief Executive Officer, said in a statement released on PR Newswire. Lisman highlighted the appeal of their "highly engineered, proprietary OEM-alternative parts and services," which are critical for airlines and maintenance, repair, and overhaul (MRO) providers seeking to keep their fleets flying.
Jet Parts Engineering, based in Seattle, Washington, specializes in FAA-approved alternative parts and repair solutions. Victor Sierra Aviation focuses on the general and business aviation markets through established brands like McFarlane Aviation and Tempest Aero Group. This focus on aftermarket parts is particularly attractive as it is often more resilient and profitable than selling components for new aircraft manufacturing, which is subject to cyclical demand.
The deal, first reported by The Wall Street Journal, represents a continuation of TransDigm's aggressive M&A playbook. The Cleveland-based manufacturer has a history of leveraging debt to acquire and integrate companies that meet its stringent criteria: high aftermarket content, proprietary technology, and strong profit margins. The company noted the purchase price includes certain tax benefits.
With an average analyst price target of over $1,600, Wall Street has maintained a bullish outlook on TransDigm, driven by its consistent execution and the post-pandemic recovery in global air travel, which fuels demand for the aftermarket services the company dominates. The latest acquisition is expected to be accretive to earnings and further solidifies its competitive moat in a highly specialized sector.
The transaction is subject to regulatory approvals and customary closing conditions. TransDigm expects to finance the deal with cash on hand, adding another set of high-performing assets to its sprawling aerospace empire.