Triumph Shares Take Flight after Sealing $3 Billion Private Equity Takeover Deal

Shares in aviation firm Triumph Group (TGI) soared over 30% in pre-market trading after it agreed a $3 billion takeover deal from private equity giants Warburg Pincus and Berkshire Partners.

Triumph Group, which provides a range of aftermarket products such as landing gear systems and cockpit controls to commercial and military aircraft, said it would become a private company following the deal.

Shareholders See the Upside in Aviation Deal

Triumph shareholders will receive $26 per share in cash which compares well with its closing price of $18.74 at close of trading on Friday. Its shares were up 35% in pre-market trading on Monday.

Dan Zamlong, managing director at Warburg Pincus, said Triumph had a strong reputation in highly engineered aerospace components and systems. “With our deep experience investing in and developing aerospace platforms, we look forward to increasing opportunities for its portfolio and capturing the growing demand for high quality aerospace components,” he said.

Greener Flying Boosts Demand for Parts

Indeed, the value of the aerospace parts manufacturing sector was hovering around $913 billion in 2023 and is expected to grow at around 4% each year until 2030. It is being driven by more passenger numbers particularly in Asia and the Middle East and demand for greener, more fuel-efficient planes.

In its most recent earnings for the second quarter, Triumph reported adjusted operating income of $36 million, up 44% on the previous year and net sales of $287.5 million, up 1%.

The deal is expected to close in the second half of this year.

Is TGI a Good Stock to Buy Now?

On TipRanks, TGI has a Moderate Buy consensus based on 2 Buy and 3 Hold ratings. TGI stock’s consensus price target is $19.60 implying an 4.59% upside.

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