Avcorp Acquires Composites Operation


VANCOUVER, April 3: Avcorp Industries Inc. (TSX."AVP") is pleased to announce that it has entered into an agreement to acquire all of the shares of Comtek Advanced Structures Ltd (Comtek), which has expertise in the design and low-cost manufacture of advanced composite aerostructures.

"The combined companies would possess an in-depth capability to design, manufacture and support a wide range of composite and metallic aircraft structures," notes Paul Kalil, President. "Avcorp's aerospace expertise along with Comtek's advanced composites capabilities will allow the new entity access to additional aerospace markets."

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 annual revenue of approximately CAD$18 million and has been in business for 13 years. It has 90 employees of which 12 are engineers involved in research and product development operating out of Burlington Ontario and Phoenix Arizona.

As part of the agreement, Avcorp is to invest CAD$1.5 million into Comtek, of which up to CAD$ 200,000 will be in shares of Avcorp at a deemed value of $2.85 per share, with the CAD$1.3 million balance for working capital.

A majority of the principals of Comtek will remain and have agreed to assign their shares to Avcorp for 500,000 Avcorp warrants (representing 1.8% of Avcorp's issued and outstanding common shares), exercisable over a three-year period from closing, at an exercise price of $2.75 in year 1, $3.20 in year 2, and $3.70 in year 3. In addition, Avcorp has agreed to pay to the principal 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. The transaction has been negotiated at arm's length. This agreement is subject to due diligence and regulatory approval, with closing anticipated in 90 days.

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 650 skilled employees and a 300,000 square foot facility near Vancouver, Canada, Avcorp is an agile Tier I supplier, providing customers with one-stop integrated aerospace design and manufacture solutions. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX."AVP"). More information is available at www.avcorp.com.

Source: Avcorp Industries Inc.

CONTACT: Sandi DiPrimo, Investor Relations, (604) 587-4938

All Topics