Moody's may lower TransDigm

Moody's Investors Service said it placed the ratings of TransDigm, Inc. on review for possible downgrade, adding that this action was prompted by the company's announcement that it had entered into a definitive agreement to purchase Aviation Technologies Inc. for $430 million in cash.

TransDigm expects to finance this acquisition primarily through issuance of senior and subordinated debt, the agency said, noting that this acquisition is expected to close in February.

The Aviation transaction represents a large, levered acquisition that could potentially increase the company's risk profile and leverage, Moody's noted.

Moody's said it believes that, at about 11 times pro forma trailing EBITDA, the acquisition is fully-priced, although ratios like this have become common in the commercial aerospace sector.

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