Arotech Corporation (NasdaqNM: ARTX) announced today that it has contracted to acquire California-based Armour of America (AoA)Incorporated, an innovative leader in ballistic armoring. AoA's latest twelve-month revenues reached $16 million, with a pre-tax net profit of $6.7 million.
Arotech will purchase all of AoA's outstanding capital stock for $22 million, with additional possible earn-outs if AoA is awarded certain material contracts. The transaction is financed with cash obtained from warrant exercises and the sale of common stock to institutional investors. Arotech announced that it has entered into a definitive agreement with several institutional investors for the purchase of an aggregate of 4,258,065 shares of its common stock at $1.55 per share off Arotech's effective shelf registration statement. The $6.6 million gross proceeds of the offering will be used primarily for the acquisition.
The company also announced that it had previously received a total of $16.5 million upon exercise of a total of 8,814,235 of its outstanding warrants.
Arotech's armor group has seen significant growth in vehicle armoring this year. The acquisition of AoA will add personal, aviation and marine armoring activities.
During the twelve months ended June 30, 2004, AoA had revenues of $16 million and net profit of $6.7 million (unaudited). In 2003 AoA's revenues reached $7.6 million, with a net profit (pre-tax) of $3.3 million.
The US Army, Navy and Coast guard, as well as other foreign military agencies, form the core of AoA's military customers.
AoA, founded in 1972, manufacturers aviation armor both for helicopters and for fixed wing aircraft, marine armor, personnel armor, armoring kits for military vehicles, fragmentation blankest and a unique ballistic/flotation vest (ArmourFloat) that is U.S. Coast Guard-certified.
AoA's management, which has overseen the company's outstanding growth, will stay with the company and continue to run the business - as a wholly-owned subsidiary of Arotech - after the acquisition.
Published by Globes [online] - www.globes.co.il - on Thursday, July 15, 2004