Air Industries Group Inc. agreed in court to reverse course and allow the $9 million sale of a welding subsidiary to CPI Aerostructures Inc.
Hauppauge-based Air Industries "has withdrawn its purported termination" of the sales agreement, as agreed in a court-ordered stipulation, CPI Aero said in a news release.
The court-ordered stipulation represented "a coming together of minds," Michael Recca, chief financial officer of Air Industries, said in an interview Wednesday morning.
Douglas McCrosson, chief executive of CPI Aero, said in an email Wednesday that if there is a "timely closing" of the deal for Welding Metallurgy Inc., there would be "no need to pursue" the $5 million in damages sought when his company filed a breach of contract lawsuit against Air Industries in July in State Supreme Court in Manhattan.
CPI Aero shares climbed 8.4 percent to close Wednesday at $9.55. Shares of Air Industries added 1.4 percent to close at $1.42.
Air Industries initially agreed to sell Welding Metallurgy to CPI Aero, an Edgewood-based aerospace contractor, in March, with the sale expected to close in the second quarter of 2018. Air Industries subsequently said it was terminating the agreement.
The court stipulation dated Tuesday says that Air Industries agreed to deliver within 45 days audited financial statements of Welding Metallurgy for 2017. The two companies agreed the acquisition will close within three weeks of the delivery of records, the court settlement said.
The transfer of records had been a point of contention leading up to the lawsuit.
When the sale was initially announced, CPI Aero had said it planned to move Hauppauge-based Welding Metallurgy and its roughly 70 employees to its 171,000-square-foot facility in Edgewood.
CPI Aero and Air Industries both supply aerospace components and assemblies to "prime" contractors such as Northrop Grumman and Boeing.