Cleveland firm to acquire Young & Franklin for $260 million

SALINA, N.Y. — Young & Franklin Inc. (YF) and its subsidiaries, including Tactair Fluid Controls Inc., will soon have a new owner.

Cleveland, Ohio–based TransDigm Group Incorporated (NYSE: TDG) announced recently that it’s acquiring them for $260 million. The acquisition price includes about $73 million of tax benefits for TransDigm over a 15-year period, the firm said in a U.S. Securities and Exchange Commission (SEC) filing.

TransDigm expects to finance the acquisition “through existing cash on hand,” according to the filing.

Founded in 1918 as Young & Franklin Tool Works, Inc., Young & Franklin designs, manufactures, and services turbine controls for the energy and oil & gas markets, according to its website. The company operates at 942 Old Liverpool Road in the town of Salina.

Its subsidiary Tactair Fluid Controls, a designer and manufacturer of hydraulic and pneumatic controls for the aerospace industry, operates at 4806 W. Taft Rd. in Clay.

Together, Young & Franklin and Tactair have 350 employees, according to the Tactair website.

TransDigm Group, through its wholly owned subsidiaries, says it is a designer, producer, and supplier of engineered aircraft components for use on “nearly all” commercial and military aircraft in service today.

TransDigm expects the acquisition, which is subject to regulatory approvals and other customary closing conditions, to close in the fourth quarter.

Neither the news release nor the Ohio firm’s SEC filing indicate what, if any, plans TransDigm has for the Salina and Clay locations it acquired.

“Both Tactair and Young & Franklin are long standing manufacturers of proprietary products with established positions, strong aftermarket content and an outstanding reputation based on product excellence. The highly engineered products will allow us to expand our content on a number of substantial platforms. The company fits well with our consistent product and acquisition strategy. As with all TransDigm acquisitions, we see opportunities for significant value creation,” W. Nicholas Howley, chairman, president and CEO of TransDigm, said in the firm’s release.

TransDigm expects Young & Franklin to generate revenue of about $75 million in 2016, with aftermarket sales comprising about 70 percent of that.

The local firm generates “nearly” all of its revenue from proprietary products and about 70 percent of the revenue results from sales that are “aerospace related,” according to the TransDigm news release. The balance is sold to the industrial gas-turbine market.

The Ohio firm reported net income of $140.6 million, or $2.52 per share, during its fiscal third quarter that ended July 2. The figure was up about 42 percent compared to its net income of $99 million, or $1.75 per share, earned in the same quarter in 2015.

TransDigm generated revenue of more than $797 million during its fiscal third quarter, up 15 percent compared to the $691 million generated in the year-earlier quarter.

Contact Reinhardt at ereinhardt@cnybj.com