TransDigm expands product portfolio with $960 million deal for Stellant Systems
By Parth Chandna
Dec 31 (Reuters) - TransDigm TDG.N said on Wednesday it would buy Stellant Systems, a portfolio company of Arlington Capital Partners, for about $960 million in cash, including tax benefits.
Cleveland, Ohio-based TransDigm said Stellant, a global designer and manufacturer of high-power electronic components and subsystems serving aerospace and defense customers, is projected to bring in roughly $300 million in revenue in 2025.
The deal is expected to help TransDigm expand its portfolio of high-margin, proprietary components used in defense, space and satellite applications at a time when global demand for mission-critical electronics is rising.
Around half of Stellant's revenue comes from the aftermarket and nearly all of it is driven by proprietary products, according to TransDigm.
The Torrance, California-headquartered company runs plants in California, Pennsylvania, New York and Massachusetts and employs about 950 staff.
"We believe the acquisition is likely to be margin dilutive in the near-term," RBC Capital Markets analyst Ken Herbert said, but added that the deal is a positive for TransDigm in driving value and is consistent with its long-term return goals.
Private equity firm Arlington Capital Partners completed its acquisition of Stellant in 2021, purchasing L3Harris' LHX.N Electron Devices and Narda Microwave-West divisions and combining them under the Stellant name.
Private equity firms in the United States have succeeded in cashing out more of their portfolio companies so far this year than in 2024, but a backlog of assets they struggled to sell as interest rates rose are still weighing on their books.
"(Stellant) has established positions across a diverse range of both commercial and defense platforms, adding new products and services to TransDigm's portfolio," TransDigm CEO Mike Lisman said.
The deal comes after TransDigm in November forecast a stronger 2026 profit, supported by firm demand for its aftermarket parts and solid growth in commercial markets.
TransDigm designs, produces and supplies highly engineered aircraft components used on nearly all commercial and military aircraft.
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