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CLEVELAND and ELMA, N.Y. - TransDigm Group Incorporated (NYSE: TDG) and Servotronics, Inc. (NYSE American: SVT) announced today a definitive merger agreement under which Servotronics will become an indirect wholly owned subsidiary of TransDigm. The transaction is valued at approximately $110 million, including certain tax benefits. According to InvestingPro data, Servotronics currently maintains a FAIR financial health rating, with a current market capitalization of approximately $26 million.
In this agreement, TransDigm will initiate a tender offer to purchase all outstanding shares of Servotronics for $38.50 per share in cash. The offer represents a 274% premium over Servotronics’ closing share price on the last trading day before the announcement, a significant uplift for a company currently trading near its 52-week low of $9.67. TransDigm plans to fund the acquisition with its available cash and does not require additional financing.
The merger has received unanimous approval from Servotronics’ Board of Directors. The tender offer is expected to commence on or before June 9, 2025, with the completion of the merger following the tender offer at the same share price.
Servotronics, a leading designer and manufacturer of servo controls and other advanced technology components, is recognized for its strong presence in aerospace and defense applications. The company, employing approximately 275 people, reported revenues of around $45 million for the fiscal year ending December 31, 2024. InvestingPro analysis shows the company operates with a moderate debt-to-equity ratio of 0.16 and maintains strong liquidity with a current ratio of 3.46, though it has faced profitability challenges in recent quarters.
Kevin Stein, President and CEO of TransDigm, expressed enthusiasm for the acquisition, highlighting Servotronics’ market leadership in servo valve technology and its alignment with TransDigm’s strategy. Bill Farrell Jr., CEO of Servotronics, also remarked on the shared business models and strategies between the two companies, anticipating growth opportunities and continued product development under TransDigm’s ownership.
The transaction is subject to customary closing conditions, including the valid tender of a majority of the outstanding shares of Servotronics common stock. Legal counsel for the deal includes Baker & Hostetler LLP for TransDigm and Bond Schoeneck & King for Servotronics, with Houlihan Lokey serving as financial advisor to Servotronics.
This merger is expected to enhance TransDigm’s portfolio of highly engineered aircraft components, which are supplied to nearly all commercial and military aircraft currently in service. The acquisition is based on a press release statement and further details will be provided to Servotronics’ stockholders once the tender offer commences. For deeper insights into aerospace and defense sector valuations and additional financial metrics, investors can access more than 10 exclusive ProTips and comprehensive analysis through InvestingPro.
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