TransDigm Group Incorporated (NYSE:TDG) is looking for M&A. During the company's second quarter of 2023 earnings conference call, Kevin Stein, President and Chief Executive Officer said that ‘Regarding the current M&A pipeline, we continue to actively look for M&A opportunities that fit our model. As we look out over the next 12 to 18 months, we have a slightly stronger than typical pipeline of potential targets. As usual, the potential targets are mostly in the small and midsize range.
I can't predict or comment on possible closings, but we remain confident that there is a long runway for acquisitions that fit our portfolio. The capital allocation priorities at TransDigm are unchanged. Our first priority is to reinvest in our businesses; second, do accretive M&A; and third, return capital to our shareholders via share buybacks or dividend; a fourth option paying down debt seems unlikely at this time, though we do still take this into consideration.
We are currently evaluating all of our capital allocation options, but both M&A and capital markets are always difficult to predict. We continue to maintain significant liquidity and financial flexibility to meet any likely range of capital requirements or other opportunities in the readily foreseeable future'. Mike Lisman, Chief Financial Officer said that ‘As we sit here today, from an overall cash liquidity and balance sheet standpoint, we think we remain in good position with adequate flexibility to pursue M&A or return cash to our shareholders via buybacks or dividends during fiscal '23'.
TransDigm Group Inc. specializes in the design, manufacturing and marketing of aerospace systems and components. Net sales break down by family of products as follows:
- engine components and control systems (50.3%): mechanical and electromechanical actuators and control systems, pumps and engine control systems, power regulators, ignition systems, thermal management systems, fluid management systems, batteries and power supply systems, motion sensors, data recording, analysis and processing systems, etc. The group also offers winches, lifting systems and cargo handling systems;
- cabin systems and equipment (47%): cockpit safety components and systems, locking systems and devices, connectors, audio control systems, specialized sanitary equipment, seat belts and safety devices, interior fittings (seats, display systems, on-board entertainment systems, etc.) lighting systems, parachutes, freight delivery systems, etc. ;
- other (2.7%): non-aeronautical systems and equipment.
At the end of September 2023, the group operated approximately 100 production sites worldwide.
The United States accounts for 64.8% of net sales.
TRANSDIGM GROUP INC. 
