Under terms of the deal, TransDigm (NYSE:TDG) will pay $122.50 in cash for each Esterline (NYSE:ESL) share outstanding, representing a 38% premium to Tuesday's closing price, and implying a market capitalization of $3.6B.
The deal, which is expected to close in the second half of 2019, will be financed through a combination of cash on hand and the incurrence of new term loans of about $2B.
The acquisition will expand TransDigm's platform of proprietary and sole source content for the aerospace and defense industries, including significant aftermarket exposure.
TDG -1.4%; ESL +30.1% premarket
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