API Technologies [ATNYD] yesterday said it has agreed to merge with the private equity firm Vintage Capital Management to acquire SenDEC Corp., a defense electronics manufacturing services firm.
Under the deal terms, API will acquire all the equity of SenDEC, which includes its electronics manufacturing operations and $30 million in cash, in exchange for the issuance of 22 million shares of API’s common stock to an affiliate of Vintage. API said it will use the $30 million to pay down its debt and emerge with net cash on its balance sheet.
API provides engineered systems, components and secure communications to government and industry customers in the United States, Canada, the United Kingdom, Europe and NATO.
SenDEC had $3.5 million in net income on $90 million in sales for its fiscal year ended July 31, 2010. The acquisition will double the size of API at around $200 million in sales. Combined, the two entities have about $20 million in earnings before interest, taxes, depreciation and amortization.
Once the deal is done API will be a mid-tier defense electronics company with a broader array of capabilities. API plans to pursue a listing on NASDAQ following the acquisition.
Brian Kahn, managing member of Vintage, will serve as chairman and CEO of API. Vintage will be the majority shareholder in API. Steve Pudles, CEO of API Defense USA, will continue in that role and Ken Fiske, the CEO of SenDEC, will continue in that role once it becomes a subsidiary of API.
The deal is expected to close within days.