Shares of aerospace components manufacturer Triumph Group spiked 34% yesterday, Monday, February 3, and hit a nearly four-year high. The trigger was an announcement that the company would be acquired at a 38% premium by affiliates of private equity giants Berkshire Partners and Warburg Pincus. Noble Capital Markets believes the deal reflects ongoing consolidation and strategic repositioning within the aerospace industry.
Details
Yesterday, Triumph Group stock jumped almost 34% to close at $25.10 per share. During the day, it hit its highest level since late April 2021.
Earlier in the day, Triumph Group announced that it would be acquired by a new entity created by investment firms Berkshire Partners and Warburg Pincus. The deal values Triumph Group at about $3 billion. Under the terms of the agreement, Triumph shareholders will receive $26.00 per share in cash, a 38% premium to the stock’s closing price on Friday, January 31, and 123% above the share price on October 9 — the last trading day before news of a potential deal first emerged, Triumph Group noted.
The deal is expected to close in the second half of 2025. Upon completion of the acquisition, Triumph Group shares will cease trading on the New York Stock Exchange.
Analyst insights
The 123% premium in the deal indicates significant confidence in the industry’s future, the investment bank and advisory firm Noble Capital Markets notes.
“The acquisition reflects the ongoing consolidation and strategic repositioning within the aerospace industry,” Noble added.
While Triumph stock is up more than 50% over the last 12 months, it is still trading well below its all-time peak of $85.50 per share from 2013.
“For existing holders the deal either represents a solid return or, if nothing else, resolution, depending on how long they have held the shares. For those who are not currently invested, there is little reason to buy in now,” the Motley Fool, an investing advice outfit, commented.
About Triumph Group
Founded in 1993, Triumph designs, manufactures, and repairs aerospace and defense systems and components. Its clients include Boeing, defense contractor Lockheed, aircraft and helicopter manufacturer Sikorsky, and the aircraft company Gulfstream.
In 1996, Triumph went public on the NYSE at $19.00 per share. It later conducted two secondary offerings: one in 1997 at $33.00 per share and another in 2021 at $37.50 per share.
Over the past decade, Triumph investors have endured plenty of turmoil, the Motley Fool recalls. The company sought to diversify its business through acquisitions and mergers, but these deals were costly, and many of the units acquired failed to live up to expectations. In recent years, Triumph has focused on selling assets, restructuring its operations, and reducing debt, which has put it in a stronger financial position, the Motley Fool argues. Bloomberg has estimated the company’s debt at $966 million.
For the fiscal-2025 second quarter (ended September 30), Triumph reported 1% year-over-year growth in net sales to $287.5 million, while net income came in at $11.9 million, versus a net loss of $1.3 million in the same period of 2023. According to the acquisition press release, the company plans to go ahead with releasing its third-quarter results in February but canceled a planned conference call with investors.
