TransDigm Surges As It Considers Paying Special Dividend

TransDigm Group Inc. (TDG) surged to a record as the maker of aircraft components said it is considering a special dividend of as much as $1.8 billion.

Shares of TransDigm rose 3 percent to $156.85 at the close in New York, the highest price since March 2006 when the company first sold stock.

TransDigm is asking lenders to agree to a new financing plan, including $700 million in new loans, according to a statement today by the Cleveland-based manufacturer. The company will use proceeds from the new debt arrangements to pay a cash dividend of $1 billion to $1.8 billion.

It would be the third special dividend the company has paid out after declaring one-time payouts in 2012 and 2009. TransDigm had $3.6 billion in total debt at the end of the fiscal year ending in September, the highest since at least 2004, according to data compiled by Bloomberg.

In the refinancing, the company also wants to change certain ratios in its existing senior secured credit facility and may seek to raise $700 million of new debt. TransDigm is presenting its plan to lenders today and there is no assurance that the refinancing or the special dividend will go ahead, it said.

The company’s shares have gained 15 percent this year, compared with a 16 percent advance for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Jennifer Surane in New York at jsurane1@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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