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API acquires Kuchera Defense Systems

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API Technologies
: 25 January, 2010  (Company News)
Revenues set to double with acquisition of defence industry subcontract supplier with experience in defence electronics and unmanned aerial vehicles
API Technologies has acquired substantially all of the assets of the Kuchera Group of Companies (KGC), including Kuchera Defense Systems and Kuchera Industries.

KGC is a large US-based defence subcontractor specialising in sophisticated electronics and highly-engineered systems for the defence, aerospace and communications industries.

Under the terms of the transaction, API acquired substantially all of the assets of KGC for $24 million, $14 million payable in cash and $10 million financed with a short-term note from the Sellers, plus 3.2 million shares of API common stock. The API shares will be issued in three tranches over a period of 24 months. The Company funded the cash portion of the purchase through a $20 million debt facility.

Founded in 1985, KGC is a supplier of sophisticated engineering services to the defence and communications industries. KGC generated approximately $65 million in revenues for the twelve month period ended June 30, 2009 and has a current backlog of over $65 million.

Products include printed circuit boards, robotic systems, unmanned aircraft, electro-mechanical assemblies and final systems integration. Fortune 100 client base including Raytheon, Northrop Grumman and Boeing. Over 100,000 square foot facility in Johnstown, Pennsylvania with approximately 300 employees, including 50 design and development engineers. Experienced and long standing management team who will continue in their leadership roles, including Carl Sax, Executive Vice President and General Manager.

'The acquisition of the assets of the Kuchera Group of Companies is a transformational step forward for our Company in becoming a true leader in the defence subcontracting industry,' stated Stephen Pudles, Chief Executive Officer of API Technologies. 'Together with our existing business, the new combined entity will be better positioned to serve our global clients, including General Dynamics, Raytheon, Northrop Grumman and governments around the world. This acquisition also includes a very experienced and diverse management team that we welcome to the API family.'

Mr Pudles continued, 'As a result of this transaction, the founders of KGC, Bill Kuchera and Ron Kuchera, will be leaving the company to pursue other opportunities. We would like to thank them for building a truly world-class company and wish them all the best in their future endeavours.'

Carl Sax, Executive Vice President and General Manager of KGC said, 'We are very excited to be joining the API family. With both companies working together, we look forward to accelerating our growth, entering new markets and making use of the core competencies of the combined API.'

Phillip DeZwirek, API's Chairman, stated, 'This transaction is another exciting and important step in API's growth to being one of the leading defence subcontractors in the world. It is immediately accretive and further enhances our financial strength and overall position.'
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