Robbins Arroyo LLP: Acquisition of Breeze-Eastern Corporation (BZC) by TransDigm Group Incorporated (TDG) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Breeze-Eastern Corporation (NYSE MKT: BZC) by TransDigm Group Inc. (NYSE: TDG). On November 19, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which TransDigm will acquire Breeze-Eastern. Under the terms of the agreement, Breeze-Eastern shareholders will receive $19.61 in cash for each share of Breeze-Eastern common stock.
Is the Proposed Acquisition Best for Breeze-Eastern and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Breeze-Eastern is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $19.61 merger consideration represents a discount of -6.6% based on Breeze-Eastern’s closing price on November 18, 2015. This premium is significantly below the average one-day premium of nearly 27% for comparable transactions within the past five years. Recently, Breeze-Eastern traded as high as $21.25 on November 2, 2015.
On October 28, 2015, Breeze-Eastern reported strong earnings results for its second quarter 2016. Net sales for the quarter were $23.9 million, an increase of 35% compared to the same period last year. Net income for the quarter was $2.9 million, an increase of 357% compared to the same period last year. In commenting on these results, Breeze-Eastern Chief Executive Officer Brad Pedersen remarked, “Breeze-Eastern again achieved strong operating performance this quarter, as the Company continues to strengthen its financial position heading into 2016. Higher new product shipments and spare part sales helped drive top line revenue. The Company’s performance for the first six months of fiscal 2016 reflects favorable timing, product mix, customer mix, solid industry demand, and improved margins. We closed the quarter with a strong cash position and are confident that we can deliver solid results in the months ahead.”
In light of these facts, Robbins Arroyo LLP is examining Breeze-Eastern’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Breeze-Eastern shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Breeze-Eastern shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.