Avcorp closes purchase of composite business
Jan. 8, 2008, Vancouver - Avcorp Industries Inc. has confirmed that it completed the closing to acquire the shares of Comtek Advanced Structures Ltd. on Dec. 31, 2007.
January 8, 2008 By Carey Fredericks
Jan. 8, 2008, Vancouver – With reference to previous announcements made
April 3 and Oct. 10, 2007, Avcorp Industries Inc. (Avcorp) is pleased to
confirm it completed the closing to acquire the shares of Comtek Advanced
Structures Ltd. (Comtek) on Dec. 31, 2007. This acquisition adds ongoing
operations and expertise in the design and competitive manufacture of advanced
composite aerostructures, plus provides access to new aerospace markets for
"Avcorp is pleased to offer integrated composite and metallic aircraft
structures to aircraft manufacturers, a distinct advantage in the pursuit of
contracts for new aircraft designs, which require light-weight, strong,
reliable structures," states Paul Kalil, President. "Not only will this
acquisition add technology that will enable Avcorp to reach it strategic
goals, but it will also allow Comtek to grow substantially with the addition
of Avcorp's customer relationships and the combined ability to offer
Comtek has invested in excess of $7 million to develop advanced
proprietary resin infusion technology. The first commercial application of
this technology by Comtek has been utilized on the Airbus A380 program. Comtek
has 90 employees and operates out of Burlington, Ontario.
In exchange for all of the issued and outstanding shares of Comtek,
Avcorp paid the following aggregate consideration to the respective
1. $222,853.96 in cash;
2. 99,458 common shares in the capital of Avcorp;
3. 450,000 common share purchase warrants exercisable into common shares
of Avcorp at a price of $2.60 in the first year, $3.00 in the second
year and $3.50 in the third year after closing; and
4. 37,880 common share purchase warrants exercisable into common shares
of Avcorp at a price of $2.50 per share for a period of 18 months
expiring June 30, 2009.
In addition, Avcorp has agreed to pay to certain shareholders of Comtek
one-third of Comtek's EBITDA for the year ending December 31, 2010, which is
payable two-thirds in cash and one-third in Avcorp shares at the then current
market price. Avcorp has invested an additional $350,000 into the business
while settling approximately $3 million in liabilities and closing its Phoenix
operations. Avcorp also set up a new $2 million operating line for Comtek
replacing the existing credit facility.
Avcorp designs and builds major airframe structures for some of the
world's leading aircraft companies, including Boeing, Bombardier, and Cessna.
With 50 years of experience, more than 750 skilled employees and 355,000
square feet of facilities Avcorp offers integrated composite and metallic
aircraft structures to aircraft manufacturers, a distinct advantage in the
pursuit of contracts for new aircraft designs, which require lower-cost,
light-weight, strong, reliable structures. Avcorp is a Canadian public company
traded on the Toronto Stock Exchange (TSX."AVP"). More information is
available at www.avcorp.com .