AirBoss Announces Acquisition of 100% Ownership of Airboss Defense Group

NEWMARKET, Ontario, Oct. 26, 2020 (GLOBE NEWSWIRE) -- AirBoss of America Corp. (TSX: BOS) (the "Company" or "AirBoss") today announced that it has acquired the 45% minority interest in AirBoss Defense Group ("ADG") that it does not currently own from Critical Solutions Holdings, LLC (“CSH”) (the “Transaction”). All figures USD unless otherwise noted.

Pursuant to the Agreement, the purchase price will be paid to CSH through the issuance from treasury of approximately 3.5 million AirBoss common shares and $20 million of cash, with $5 million payable on closing and $5 million payable on a quarterly basis for the following three quarters.

ADG was formed January 1, 2020 through the merger of AirBoss’s Defense and Industrial rubbers solutions businesses and other operations in Acton Vale, Quebec with Critical Solutions International, Inc. ("CSI"), a leading global supplier of route clearance vehicles, countermine capability and survivability products to U.S. and foreign military forces.

Through the first half of 2020, AirBoss’s defense revenues quadrupled, operating income from the ADG segment grew fivefold, and ADG generated approximately $20 million in profit, driven by a major contract for ADG’s respirator systems by the U.S. Federal Emergency Management Agency. During the third quarter, ADG received a similar major contract from the U.S. Department for Health and Human Services. It has also received other governmental and non-governmental orders for personal protective equipment (PPE) during the current pandemic. Effective today, AirBoss will begin including 100% of ADG's net income in AirBoss' net income and EPS.

The proposed acquisition will not impact ADG’s management or operations as it was already tightly integrated within AirBoss of America.

“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,” said Gren Schoch, CEO of AirBoss. “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.”