A $9 million deal for CPI Aerostructures Inc. to buy the specialty welding subsidiary of another Long Island aerospace contractor is in jeopardy, according to dueling news releases issued Monday and Tuesday.
The first news release, issued Monday night by Edgewood-based CPI Aero, said it had received notice from Hauppauge-based Air Industries Group "that claims to terminate" the agreement under which CPI would purchase Welding Metallurgy Inc. The purchase agreement was announced in March.
CPI Aero said in the statement that it "disputes the purported termination" and that the failure of Air Industries "to provide full access to WMI's books and records ... is a material breach of the agreement."
The deal had been expected to close in the second quarter of 2018.
CPI Aero said it "is considering all of its options against Air Industries under the agreement."
Air Industries issued its own release after the stock market closed Tuesday.
"Air Industries gave CPI more than adequate time, access and assistance to close this transaction [in a] timely [manner]," Air Industries chief executive Luciano Melluzzo said in the statement. "The contract had a termination date of June 19, 2018, and we granted CPI an extension and offered concessions."
Melluzzo said "it became increasingly apparent that CPI was simply not going to be able to close this transaction on a timely basis" and the company decided to "cease efforts in closing the transaction."
In a telephone interview Tuesday, Douglas McCrosson, president and chief executive of CPI Aero, said the company wants to complete the transaction, "but we want to do it on the terms of the contract we signed."
Welding Metallurgy, with about 70 employees, provides specialty welded products and assemblies to aerospace customers such as Lockheed Martin, Northrop Grumman and Sikorsky.
CPI Aero said it planned to move Welding Metallurgy from Hauppauge to CPI's 171,000-square-foot Edgewood facility.
When the sale was announced, Melluzzo, who became Air Industries' CEO in November, said it would give the company liquidity.
CPI Aero makes structural assemblies for helicopters and fixed-wing aircraft. Air Industries makes assemblies and components, including landing gear, for military aircraft.
Shares of CPI Aero fell 0.8 percent Tuesday to close at $10.22. Air Industries stock gained 0.7 percent to $1.74.