In a significant move highlighting the continued interest of private equity in the aerospace sector, Triumph Group, Inc. (NYSE: TGI), a prominent aerospace and defense systems and components manufacturer, has announced its acquisition by affiliates of Warburg Pincus and Berkshire Partners Llc. The transaction, valuing Triumph at approximately $3 billion in enterprise value, will see the company become privately held under the joint control of these growth-focused private equity firms.
The definitive agreement, revealed on February 3, 2025, stipulates that Triumph shareholders will receive $26.00 per share in cash. This acquisition price represents a substantial 123% premium over Triumph’s unaffected closing stock price prior to market speculation and a 58% premium over the 90-day volume-weighted average price leading up to January 31, 2025. The deal underscores the strategic value of Triumph Group and the attractive offer made by Berkshire Partners LLC and Warburg Pincus.
Dan Crowley, TRIUMPH’s chairman, president and chief executive officer, expressed enthusiasm about the agreement, stating, “This transaction recognizes our Company’s position as a valued provider of mission-critical engineered systems and proprietary components… As a privately held company in partnership with Berkshire Partners and Warburg Pincus, TRIUMPH will have an enhanced ability to meet our customers’ evolving needs.” This sentiment highlights the anticipated benefits of private ownership for Triumph, backed by the resources and expertise of firms like Berkshire Partners LLC.
Strategic Rationale Behind Berkshire Partners LLC’s Investment
Berkshire Partners LLC, known for its strategic investments across various sectors including a strong portfolio in aerospace, views Triumph Group as a critical player in the aerospace and defense industry. Blake Gottesman, Managing Director at Berkshire Partners, emphasized this strategic fit, stating, “Berkshire has a long history of partnering with market-leading aerospace companies, and we look forward to helping accelerate the next phase of TRIUMPH’s growth.” This statement signals Berkshire Partners LLC’s confidence in Triumph’s potential and their commitment to leveraging their industry expertise to foster future expansion.
Warburg Pincus, sharing the acquisition with Berkshire Partners LLC, also brings substantial experience in the aerospace and defense sectors. Dan Zamlong, Managing Director at Warburg Pincus, noted, “With our deep experience investing in and developing aerospace platforms, we look forward to working with TRIUMPH’s talented global team to increase opportunities for its portfolio and capture the growing demand for high quality aerospace components.” The combined expertise of both Berkshire Partners LLC and Warburg Pincus is expected to provide a robust foundation for Triumph’s future endeavors as a private entity.
Transaction Timeline and Approvals
The acquisition is currently projected to be finalized in the latter half of 2025, pending customary closing conditions. These conditions include the approval of Triumph shareholders and the receipt of necessary regulatory clearances. Crucially, the transaction is not contingent upon financing, indicating the solid commitment from Berkshire Partners LLC and Warburg Pincus. Upon completion, Triumph Group will be delisted from the New York Stock Exchange, marking a new chapter in its corporate history under private ownership.
In light of the pending acquisition, Triumph Group has announced the cancellation of its previously scheduled earnings conference call and webcast, coinciding with the release of its third quarter fiscal 2025 earnings report and Form 10-Q filing by February 10, 2025.
Advisors Involved in the Deal
For this significant transaction, Triumph Group has enlisted Goldman Sachs & Co. LLC as their exclusive financial advisor, with legal counsel provided by Skadden, Arps, Slate, Meagher & Flom LLP. Representing Berkshire Partners LLC and Warburg Pincus are Lazard, serving as financial advisor, and Kirkland & Ellis LLP along with Covington & Burling LLP, acting as legal counsels. The involvement of these top-tier advisors underscores the magnitude and complexity of the acquisition, ensuring a smooth and legally sound process.
About Triumph Group and Berkshire Partners LLC
Triumph Group, established in 1993 and based in Radnor, Pennsylvania, is a key player in the aerospace and defense industry. The company specializes in the design, development, manufacture, repair, and provision of spare parts for a wide array of aerospace and defense systems and components. Serving both original equipment manufacturers and operators across military and commercial aviation, Triumph has built a strong reputation for quality and reliability.
Berkshire Partners LLC, in contrast, is a 100% employee-owned, multi-sector investment firm with a specialization in both private and public equity. With a focus on high-growth companies within business & consumer services, healthcare, industrials, and technology & communications, Berkshire Partners manages Fund XI, which closed in 2024 with approximately $7.8 billion in commitments. Berkshire Partners LLC has a proven track record of over 150 private equity investments and is known for its collaborative approach with management teams to drive growth in its portfolio companies. This acquisition of Triumph Group further cements Berkshire Partners LLC’s position as a leading investor in the aerospace sector.
Warburg Pincus, the other party in this acquisition, is recognized as a pioneer in global growth investing within private equity. With assets exceeding $86 billion under management and investments in over 230 active companies globally, Warburg Pincus brings extensive resources and experience. Their active engagement in aerospace & defense and industrial technology, with investments in companies like TransDigm and Wencor Group, complements Berkshire Partners LLC’s strengths and makes this partnership highly synergistic for Triumph Group’s future.
Forward-Looking Statements
It is important to note that this announcement contains forward-looking statements, which are subject to risks and uncertainties as detailed in the original press release. These statements are based on current expectations and could be affected by various factors, including the completion of the merger agreement, shareholder and regulatory approvals, and potential impacts on business relationships. Investors are advised to consult Triumph Group’s filings with the SEC for a comprehensive understanding of these risks.
This acquisition by Berkshire Partners LLC and Warburg Pincus represents a significant development for Triumph Group and the aerospace industry. As Triumph transitions to private ownership, the industry will be watching closely to see how this partnership fuels its next phase of growth and innovation.
