SANTA ANA, CA – TTM Technologies has agreed to acquire Telephonics Corp. in a debt-free cash transaction for $330 million, subject to customary working capital adjustments at closing.
Telephonics provides intelligence, surveillance and communications solutions deployed across land, sea and air applications. The transaction is expected to broaden TTM’s Aerospace and Defense product offering.
“I am excited for Telephonics to join TTM as we continue on our journey to move up the value chain and provide more engineered products to our offering for our customers,” said Tom Edman, CEO, TTM. “We expect the complementary portfolio and skills will enhance TTM’s strategic capabilities and growth opportunities, enabling us to deliver significant benefits to our Aerospace and Defense customers. We also expect the transaction to be immediately accretive to our non-GAAP EPS.”
“This is a compelling strategic combination that we expect will meaningfully enhance our product offering to our Aerospace and Defense customers with engineered system-level solutions,” said Cathie Gridley, president, TTM’s Aerospace and Defense business unit. “This acquisition positions TTM with full vertical integration capability from printed circuit board to highly sophisticated OEM solutions to better meet our Aerospace and Defense customer needs.”
TTM’s A&D is expected to be approximately 40% of total company revenues, or approximately $1 billion. The acquisition would more than double the company’s A&D design and development engineering talent, with the addition of systems engineering expertise in RF/Microwave-based integrated systems.
TTM has identified approximately $12 million in pre-tax, run rate cost synergies expected to be realized by the end of 2024. The firm expects to finance the purchase with cash on hand.
At the end of 2021, TTM had $537.7 million in cash on the balance sheet.
The transaction is subject to customary closing conditions, including regulatory approvals. It is expected to close in the second quarter of 2022.