By Jack Liang, Anastasia Malikova, Shir Lyn Lau, Hunter Pang (LSE); Maximilien Kender, Jules Bedrossian and Amin Ouamar (HEC Paris)
Photo: Hans Dorries (Unsplash)
Overview of the deal
Acquirer: Warburg Pincus and Berkshire Partners
Target: Triumph Group
Implied Equity Value: $2.0 million
Total Transaction Size: $3.0 billion
Closed Date: Expected to close in H2 2025
Target advisor: Goldman Sachs (financial), Skadden, Arps, Slate, Meagher & Flom LLP (legal)
Acquirer advisor: Lazard (financial), Kirkland & Ellis LLP and Covington & Burling LLP (legal)
Triumph Group, Inc. (NYSE: TGI) announced on February 3, 2025, that it has entered into a definitive agreement to be acquired by private equity firms Warburg Pincus and Berkshire Partners for approximately $3 billion. Under the agreement terms, TRIUMPH shareholders will receive $26.00 per share in cash, representing a 123% premium over the company's unaffected closing stock price and a 58% premium over the 90-day volume weighted average price prior to January 31, 2025.
This strategic acquisition is key to transitioning TRIUMPH from a public company to a privately held entity, jointly controlled by both private equity firms. Dan Crowley, TRIUMPH's chairman, president and CEO, noted that the transaction delivers "immediate, certain and premium cash value" to shareholders. TRIUMPH, having successfully optimized its portfolio in recent years, has established itself as a valued provider of mission-critical engineered systems and proprietary components for both OEM and aftermarket customers in the aerospace sector.
Despite the acquisition, TRIUMPH's leadership team, headed by Dan Crowley, will continue to guide the company, ensuring that its reputation for high-quality aerospace components is maintained under the new ownership structure. By partnering with Warburg Pincus and Berkshire Partners, TRIUMPH aims to leverage synergies and enhance its ability to meet evolving customer needs while creating more opportunities for its employees and accelerating its growth trajectory in the aerospace and defense industry.
“This transaction recognises our company’s position as a valued provider of mission-critical engineered systems and proprietary components for both OEM and aftermarket customers. 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 and provide more opportunities for our valued employees." - Dan Crowley, Triumph Chairman, President and CEO
Company Details (Acquirer - Warburg Pincus & Berkshire Partners)
Warburg Pincus is a leading global private equity and venture capital firm that invests across all stages of a company’s life cycle, from early-stage startups to mature businesses. With a growth-focused strategy, the firm drives long-term value through active collaboration with management teams and a sector-diversified portfolio. As of 2023, the firm manages $90.7bn in AUM across sectors including energy, financial services, healthcare, industrials, and technology.
Berkshire Partners is a 100% employee-owned private equity and venture capital firm, operating as a subsidiary of Berkshire Partners Holdings. As of 2023, the firm manages $23.3bn in AUM across a broad range of sectors, targeting companies with enterprise values between $50mn-$2bn, typically with a 3-5-year investment horizon.
Warburg Pincus:
CEO: Jeffrey David Perlman
Number of employees: 330
Market Cap: x
LTM Revenue: x
LTM EBITDA: x
No public information. Instead found:
AUM 2023: $90,685mn
Estimated Dry Powder: $15,644mn
Total no. of Investments: 1,205
Active Investments: 601
Recent Transactions: Acquisition of minority stake in United Trust Bank Limited (Dec 2024), Investor group (including Warburg Pincus) $3.8bn acquisition of ESR Group (Dec 2024); $125mn acquisition of minority stake in Contabilizei (Oct 2024)
Berkshire Partners:
Founded in 1986, headquartered in Boston, USA
CEO: 100% employee-owned, run by a team of MDs
Number of employees: 142
Market Cap: AUM 2023: $90,684,747M
EV: -
LTM Revenue: -
LTM EBITDA: -
LTM EV/Revenue: -
LTM EV/EBITDA: -
No public information. Instead found:
AUM 2023: $23,273M
Estimated Dry Powder: $8972M
Total no. of Investments: 148
Active Investments: 56
Recent Transactions: Acquisition of minority stake in Thrive Operations (Jan 2025); (Details Undisclosed) Acquisition of Electric Power Engineers (Jan 2025); (Details Undisclosed); Acquisition of RJW Transport (Mar 2024)
Sources: Warburg Pincus, Berkshire Partners, S&P Capital IQ Pro
Company Details (Target - Triumph Group)
Triumph Group is an American aerospace components manufacturer that designs, engineers, manufactures, repairs, and provides spare parts across a broad portfolio of aerospace and defense systems and components. The company serves original equipment manufacturers (OEMs) and operators of commercial and military aircraft, offering products and services such as hydraulics, fuel systems, landing gear systems, and more. Founded in 1993 and headquartered in Radnor, Pennsylvania, USA, Triumph Group operates approximately 36 facilities across North America and Europe, employing around 4,800 individuals globally.
Triumph services military and commercial aircraft, had a market capitalization of about $1.45 billion, as of Friday's close, according to data compiled by LSEG.The acquisition by Warburg Pincus and Berkshire Partners valued Triumph Group at approximately $3 billion, including net debt of $1.3 billion, leading to a premium of 123% over Triumph's unaffected closing stock price last fall.
For the trailing twelve months (TTM) leading up to the acquisition, Triumph Group reported revenue of $1.24 billion and EBITDA of $180.64 million. Based on these figures, the transaction valued the company at an EV/Revenue multiple of approximately 2.42x and an EV/EBITDA multiple of approximately 16.6x.
Founded in 1993, headquartered in Radnor, Pennsylvania
CEO: Daniel J. Crowley
Number of employees: ~4,800
Market Cap: Approximately $1.45 billion (as of Friday 31 close)
EV: $3 billion
LTM Revenue: $1.24 billion
LTM EBITDA: $180.64 million
LTM EV/Revenue: Approximately 2.42x
LTM EV/EBITDA: Approximately 16.6x
Projections and Assumptions
Short-Term Consequences
Triumph’s acquisition by Warburg Pincus and Berkshire Partners, announced on February 3, 2025, brings immediate financial benefits for its shareholders. They will receive $26.00 per share in cash, a 123% premium over pre-announcement prices. With Triumph going private, traditional EPS accretion/dilution metrics are no longer applicable. However, recent Q3 results—with revenues of $316 million and EBITDA of $56 million—underscore a solid financial performance, reinforcing the premium offered. Triumph will continue focusing on its core aerospace components and aftermarket services, following strategic divestitures of non-core assets between 2020 and 2023. Its global operations, spanning 28 facilities in 12 U.S. states and 7 countries, will remain unchanged, ensuring continuity in serving major clients without any immediate operational restructuring.
CEO Dan Crowley reassured employees that the transition would be smooth, stating, “This transaction will deliver immediate, certain and premium cash value to our shareholders,” and emphasizing that it will be “business as usual” until the deal closes. No layoffs or significant management changes are planned, and existing employee benefits, including the 401(k) plan, remain intact. The market reacted strongly to the news—Triumph’s shares surged by 34% on announcement day, quickly approaching the offer price. Analysts have adjusted their ratings to reflect a high probability of a successful close, indicating robust investor confidence in the transaction’s short-term prospects.
Long-Term Upsides
Triumph's acquisition by Berkshire Partners and Warburg Pincus will enhance its market positioning. Leveraging increased scale will drive long-term profitability and resilience. The combined expertise and resources will allow Triumph to expand service offerings, optimize financial operations, and strengthen customer relationships across key markets.
Operational efficiencies will be crucial to improve financial performance, with projected cost synergies of $65–$70 million annually through streamlined processes and overhead reductions. Revenue growth is expected from market expansion, cross-selling opportunities, and product innovation. However, success hinges on seamless integration, disciplined execution, and effective risk management.
Triumph operates in a dynamic industry with moderate growth potential, bolstered by digital transformation and strategic investment. Backing from Berkshire Partners and Warburg Pincus will provide capital and industry expertise, enabling Triumph to capitalize on emerging trends while navigating market uncertainties.
If executed successfully, the acquisition will create long-term value for stakeholders by enhancing operational efficiency, strengthening financial stability, and positioning Triumph as a more competitive player in its industry.
Risks and Uncertainties
The $3bn acquisition of Triumph by Berkshire Partners and Warburg Pincus comes with many risks and uncertainties. The first risk that comes to mind is related to possible post-merger discrepancies between the two buyers. If both PE firms have already collaborated in the past (in 2019 for the recapitalization of Consolidated Precision Products and in 2022 through significant common investments in Ensemble Health Partners), this common acquisition may stress the differences in management and strategic approach between the two firms. Indeed, Berkshire Partners is known for its collaborative strategy with existing management and its long-term operations, whereas Warburg Pincus is more growth-focused and exit-driven. In addition to that first risk, there are limited exit options to this acquisition since Triumph’s assets are highly specialized.
Moreover, the leverage risks are increased by reduced financial flexibility and increased interest expenses. In this acquisition, high debt levels can limit the ability of Triumph to make the wide cash-consuming investment in R&D that is needed in the very competitive aerospace industry to maintain growth and orders. In addition, the high debt-to-equity ratio inherent to this acquisition is risky given the long cash conversion cycles specific to the aerospace industry. This means that the free cash flow generated by Triumph will need to be high (despite the large upfront investments and late customer payments) in order to pay the interest on the debt contracted.
The final uncertainty regarding the outcome of this transaction is linked to the risk of supply chain disruption. The disruption of the American free-trade policy and the unpredictable tariff policies of the Trump administration may be a risk for the stability of the supply of rare-earth minerals (that are essential to the top-tier aerospace technologies developed by Triumph) as well as for its division of production processes within the USMCA. To illustrate this first point, we can take the example of neodymium and dysprosium, both vital to Triumph, but mainly located in China, a major issue as we enter into the early stages of a trade war between the US and the red dragon. The disruption of the USMCA free-trade framework through the implementation of 25% tariffs on imports from Mexico and Canada on March 4th is another burden for Triumph, which had developed factories in Zacatecas and Baja California.
“TRIUMPH has a strong reputation as a leader in highly engineered aerospace components and systems, and we are excited about partnering with them in this next chapter of growth. 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.” - Dan Zamlong, Managing Director at Warburg Pincus