TransDigm Group

TransDigm was formed in 1993[2] under the name TD Holding Corporation.[3] It was founded with an initial equity investment of $10 million.[4]^: 228 The company was created by founders W. Nicholas Howley and Douglas Peacock along with private equity firm Kelso & Company, in order to acquire and consolidate four industrial aerospace companies from IMO Industries Inc. in a leveraged buyout.[2][5][6]^: 8 Those four companies were Adel Fasteners, Aero Products Component Services, Controlex Corporation and Wiggins Connectors.[4]^: 221 Once the acquisitions were completed, TD Holding was renamed to TransDigm, Inc. and based in Richmond Heights, Ohio.[3]^: 490

Originally, TransDigm manufactured and marketed a small group of aircraft components, such as batteries, pumps, and fuel connectors.[3]^: 490 TransDigm expanded its range of aircraft component products over time through acquisitions of other aerospace component manufacturers,[3]^: 492 growing in revenues by about 25 percent per-year from 1993 to 1998.[7] In 1998, Odyssey Investment Partners, a private equity firm, acquired TransDigm from Kelso & Company.[5] After the September 11th attacks, the aerospace industry declined temporarily, resulting in losses and layoffs for TransDigm.[3]^: 491

By 2002, TransDigm had grown to $300 million in annual revenues,[5] up from $131 million in 1999.[3]^: 491 TransDigm was acquired from Odyssey Investment Partners by another private equity firm, Warburg Pincus LLC, in 2003 for $1.1 billion.[5] In 2006, the company went public on the New York Stock Exchange.[8][4]^: 220 By the following year, TransDigm had grown to $593 million in annual revenues.[3]^: 492

TransDigm focuses largely on acquiring other aerospace component manufacturers for expansion and growth.[3]^: 492 The company acquired more than 60 businesses in its first 25 years of operation,[4]^: 228 49 of which were completed after TransDigm's initial public offering in 2006.[9]

In 2010, TransDigm acquired competing aftermarket aerospace parts company McKechnie Aerospace Holdings for $1.27 billion.[10] In 2016, it bought Data Device Corp., a power, networking, and electronics company, for $1 billion.[11] Two years later, TransDigm purchased a competing parts manufacturer, Esterline, for $4 billion.[12] This was the largest acquisition in TransDigm's history.[9]

In March 2022, TransDigm acquired the Montreal-based helicopter mission equipment company, DART Aerospace approximately $360 million in cash.[13]

TransDigm acquired aviation and transportation research company Calspan for $725 million in May 2023.[14][15]

In 2019, the Department of Defense audited TransDigm's pricing practices for government contracts.[16][17] It concluded that the Pentagon was purchasing parts from TransDigm at very high profit margins, such as a 9,400% markup on a metal pin.[16][17] According to the authors of Lessons from the Titans, this is because older aerospace components are not expensive to produce individually, but require keeping expensive dated manufacturing lines active for small-batch production.[4]^{: 224–225} After a congressional hearing criticizing TransDigm's pricing practices, the company agreed to refund the Pentagon $16 million.[18]

TransDigm's revenues grew by 15-fold from TransDigm's IPO in 2006 to 2020.[4]^: 226 However, business declined in 2020 due to the COVID-19 pandemic's impact on the aerospace industry.[19]

In 2022, founder Nick Howley was again called to testify before Congress on accusations of price gouging. A Department of Defense review alleged that the company charged $119 million for parts that should have cost $28 million.[20]