S&P puts TransDigm on watch

Standard & Poor's said it placed TransDigm Inc.'s B+ corporate credit rating on CreditWatch with negative implications.

"The action reflects the proposed acquisition of McKechnie by TransDigm for about $1.27 billion in cash," S&P analyst Roman Szuper said in a statement.

"This largely debt-financed purchase - its largest to date - will increase TransDigm's financial risk, with pro forma total debt to EBITDA of about 6x, a relatively elevated level for the rating. The transaction is expected to close before the end of 2010. TransDigm has a good history of integrating acquired companies and improving their earnings and cash generation."

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