- AirBoss of America (BOS) now wholly owns AirBoss Defense Group (ADG), after acquiring the remaining 45 per cent minority interest
- The acquisition from Critical Solutions Holdings has a purchase price consisting of 3.5 million AirBoss shares and approximately C$26.4 million
- Since being formed in January 2020, ADG has grown steadily with the help of various government contracts
- Effective immediately, 100 per cent of ADG’s net income will be included in AirBoss’ net income and earnings per share
- AirBoss of America (BOS) is up 3.92 per cent and is currently trading at $18.57 per share
AirBoss of America (BOS) now wholly owns AirBoss Defense Group (ADG), after acquiring the remaining 45 per cent minority interest.
The company formed ADG on January 1 of this year, in collaboration with Critical Solutions International. The joint venture combined AirBoss’ Defense and Industrial rubbers solutions businesses with CSI’s route clearance vehicles, countermine capability, and survivability products for US and foreign militaries.
After ADG’s formation, AirBoss’ defense revenues quadrupled during the first half of 2020, with operating income from the ADG segment growing fivefold. In particular, ADG generated approximately C$26.4 million in profit during this time, thanks to a major contract from the US Federal Emergency Management Agency (FEMA).
Since then, ADG has grown steadily with the help of various contracts with US government agencies. Many of these contracts have been for personal protective equipment (PPE), which has been in high demand due to the COVID-19 pandemic.
In light of ADG’s considerable success, AirBoss sought to increase its ownership in the defense segment to 100 per cent. The company has done so by acquiring the interest it previously did not own from Critical Solutions Holdings.
In consideration of the acquisition, AirBoss will issue 3.5 million of its common shares to Critical Solutions Holdings. It will also pay approximately C$26.4 million in cash, with roughly C$6.6 million payable on closing, and another $6.6 million payable on a quarterly basis for the next three quarters.
Effective immediately, 100 per cent of ADG’s net income will be included in AirBoss’ net income and earnings per share. AirBoss’ CEO, Gren Schoch commented on the company’s consolidation of ownership in ADG.
“Through the course of 2020, the financial and operational benefits from the creation of ADG have borne out, and resulted in a significant deleveraging of our business.
“The acquisition of full ownership of ADG will now provide us additional flexibility as it relates to future growth strategies for AirBoss, including potential M&A, and eliminate the minority interest in ADG’s profits and cash flows, which is anticipated to be well-received by our shareholders and potential new investors,” he said.
AirBoss of America (BOS) is up 3.92 per cent and is trading at $18.57 per share at 11:31am EDT.