TransDigm Group Inc. [TDG] on Monday said it has agreed to sell two business units involved in providing advanced visualization solutions for global defense, air traffic control and security end markets to the private equity firm OpenGate Capital for $200 million.
TransDigm acquired the ScioTeq and TREALITY Simulation Visual Systems businesses as part of its $4 billion acquisition of Esterline Technologies in 2019. The two business units have about 450 employees combined and generated about $135 million in sales for the fiscal year that ended in September 2020.
“As previously communicated, we have been considering potentially divesting a few primarily defense, former Esterline businesses that do not align well with TransDigm’s strategy,” W. Nicholas Howley, TransDigm’s executive chairman, said in a statement. “These are well established businesses in the defense industry, and we are confident that their customers will continue to be well-served as we work toward a successful completion of the transaction.”
The transaction is subject to regulatory approvals and is expected to close during the second quarter of 2021. The two businesses operate primarily in Belgium and have other locations in the U.S.
Jefferies aerospace and defense analyst Sheila Kahyaoglu said in a note to clients that TransDigm plans to divest former Esterline defense businesses that have combined annual sales in the $250 million to $300 million range. So far, including the deal with OpenGate, she estimates that TransDigm has divested about $170 million in sales from Esterline businesses.