January 7, 2008
VANCOUVER With reference to previous announcements made April 3 and October 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 December 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.
“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 integrated solutions.”
Comtek has invested in excess of CAD$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 shareholders:
- $222,853.96 in cash;
- 99,458 common shares in the capital of Avcorp;
- 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
- 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.
About Avcorp
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 http://www.avcorp.com/.
