TenCate Aerospace & Armor Composites group has signed a Letter of Intent to acquire the armor company Composix Co. (Newark, Ohio, USA). TenCate has been given exclusivity to conduct a final due diligence process. The expectation is that the final share purchase agreement will be completed prior to the end of January 2008. The purchase is subject to government approval in the United States.
TenCate Aerospace & Armor Composites USA operates in the American market mainly in the field of composite materials for use in civil and military aviation, aerospace and industrial applications and in the armor market for personal, vehicle, aircraft and watercraft protection. (Anti-Ballistics).
In addition, through TenCate Protective Fabrics USA, TenCate has a major share in the market for fire resistant, protective fabrics used in the production of military uniforms.
TenCate is a leading manufacturer worldwide of high-grade specialized materials. Its activities are concentrated in the field of protective and safety fabrics, composite materials & armor, geotextiles and synthetic turf. TenCate is listed on the NYSE Euronext Amsterdam Stock Exchange.
Market for Armor Materials
TenCate is a one of the foremost companies in Europe in the field of personal protection and vehicle armor. The company is a supplier of high-grade composite armor products to both military and commercial markets. The Danish company Roshield was acquired by TenCate at the beginning of 2007 and has considerably strengthened TenCate’s position within the European vehicle market. In addition to the European market, TenCate Advanced Armor-Europe is also focused on the Asian and South American markets.
TenCate Advanced Composites USA has a growing market share supplying armor for personal, vehicle, aircraft and watercraft protection for the US Military and associated contractors. TenCate wishes to expand its position within this market – especially in the field of vehicle armor products where major modernization and expansion programs are planned for the future.
Composix Co. (Newark, Ohio, USA) is a leading company in the rapidly expanding armor market in the United States. Composix produces advanced armor solutions (fiber-reinforced composites and ceramics) for the protection of vehicles (Mine Resistant Ambush Protected Vehicles - MRAP, armored personnel carriers, trucks, tactical vehicles such as HMMWV) aircraft, ships/watercraft and military personnel.
The company has an excellent reputation as a developer of revolutionary concepts and as an engineering partner (prototyping and design of production processes). Partly as a result of this, Composix has become an important partner of the US Government and its associated vehicle manufacturers and contractors.
Composix current annual sales are at a level of approximately US $100 million. The company has shown strong growth in the past few years and this is expected to continue.
Synergy with TenCate
The acquisition of Composix is an important step in the implementation of the strategy to expand further in the largest global armor products market. The addition of Composix to TenCate Advanced Composites USA’s activities would mean a significant acceleration in this growth and would give TenCate a major USA based market position in the growing hard armor market for military vehicles.
The combination of the two companies’ knowledge, purchasing power and market positions will present a major opportunity to achieve strong synergistic effects.
The acquisition fits into TenCate’s strategic business model and it creates a leading position in the market for anti-ballistic light weight composite materials.
Through this acquisition TenCate will be able to supply this fast growing market more successfully. This important strategic step increases the relevant importance of composites within TenCate’s portfolio.
Other information and completion of the transaction
This acquisition will be financed through the current credit facilities of TenCate.
The transaction is expected to be completed before the end of January 2008. No further financial details will be provided about either Composix or the acquisition as such. TenCate is represented in the transaction by ABN-AMRO Bank and Wachovia Securities is serving as financial advisor to Composix Co.