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TransDigm Group’s purchase of alternative-parts specialists Jet Parts Engineering and Victor Sierra Aviation should not be read as a meaningful shift in the company’s parts-offering strategy, its top executive said.
“We bought these businesses because we think they’re fundamentally good businesses on which we can make a 20% [internal rate of return (IRR)],” CEO Mike Lisman said on TransDigm’s fiscal 2026 first-quarter earnings call Feb. 3. “The businesses will run and operate themselves, and that’s why we bought these two companies.”
TransDigm in January announced its plan to purchase Jet Parts, which serves mostly the air transport market, and Victor Sierra, a business and general aviation specialist, from private equity firm Vance Street Capital.
The $2.2 billion deal, which has not closed, was one of several involving parts suppliers in recent months. TransDigm also announced its intent to buy electronic components and subsystems supplier Stellant System in late December. But Jet Parts and Victor Sierra’s focus on parts manufacturer approval (PMA) parts raised some eyebrows, as TransDigm’s specialty is supplying proprietary parts to top-tier manufacturers and their customers. It generated 32% of its $2.3 billion first quarter revenue from the commercial aftermarket.
Lisman said that while TransDigm sees growth opportunities in PMA, the deals were more about how the companies perform than what they do.
“We modeled up, and we built a five-year [leveraged buy-out] model. Same approach we’ve always taken,” he said. “And ask ourselves, can we hit 20% IRR at the price we have to pay? And we think that’s the case with both of these businesses.
“We think there’s a good growth trend here in PMA,” Lisman continued. “It’s something that’s not going to see explosive growth, but it’s probably going to grow a little bit above the market. This gives us a position in that space and a way to benefit from that growth.”
Jet Parts and Victor Sierra will run alongside TransDigm’s existing but small PMA business in its operating units. While internal collaboration is possible, Lisman said it would be done like any other deal with a third-party supplier.
“Our businesses run themselves, so anything of that sort would have to be an arm’s length agreement between the op units and those businesses,” he said. “That certainly wasn’t in our acquisition case and not what we banked on. I think, as you guys know, our 53 businesses and going on 56 will run themselves independently.”
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