Avcorp Acquires Machining Operation
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New acquisition adds CAD$ 2 million EBITDA and CAD$ 11 million in revenue - expands machining capacity and capabilities and adds to customer base - continues strategy to grow core business, as announced with expansion of leadership team
VANCOUVER, March 7 -- Avcorp Industries Inc. (TSX."AVP") is pleased to announce that it has entered into an agreement to acquire all of the shares of a machining business, which revenues are more than 50% military based. Annual revenues of business, which has been in operation for 20 years, is approximately CAD$ 11 million and EBITDA in excess of CAD$ 2 million. The business operates out of a 30,000 square foot dedicated facility in British Columbia. Existing management of the machining operation will be retained. The agreement is subject to completion of due diligence and a definitive agreement by April 30, 2007, with closing scheduled for May 31, 2007.
Michael Scholz, Chairman, advises, "The acquisition will allow Avcorp to expand its capacity, capabilities and client base as it continues to grow its core business."
The purchase price of CAD$ 6 million will be payable by:
oCAD$ 2.4 million cash on closing;
oCAD$ 1.8 million by way of Avcorp shares at $2.35 per share; and
oCAD$ 1.8 million by way of a three-year 7% convertible debenture
convertible to shares of the Company at the following conversion
rates:
Year 1: $2.65
Year 2: $3.10
Year 3: $3.60
About Avcorp
Avcorp designs and builds major airframe structures for some of the world's most respected 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.
"Michael Scholz"
MICHAEL SCHOLZ
CHAIRMAN
Source: Avcorp Industries Inc.
CONTACT: Sandi DiPrimo, Investor Relations, (604) 587-4938
