In a complex merger that will put Ronkonkoma-based API Technologies Corp. under the leadership of a private equity firm, all company officers and the entire board will resign and API will double in size by acquiring an upstate rival.
API will combine with another defense contractor, SenDEC Corp., of Fairport. Leading the new combined company will be Brian Kahn, managing member of Vintage Capital Management of Orlando, Fla.
"Under the terms of the merger transaction, API will acquire 100 percent of the equity of SenDEC. . . in exchange for the issuance of 22 million API common shares to an affiliate of Vintage," API said in a statement. As a result, Vintage will become majority stockholder in API.
“After the transaction [just as it did before the transaction] API will continue operations in Ronkonkoma. This includes engineering, sales and administration,” Tara Flynn Condon, marketing director for API, said in an e-mail Tuesday morning. “We do not anticipate that jobs will be moved or lost as a result of this transaction.”
API does not expect that the merger will affect its current company structure or operations on Long Island. “Overall, the transaction has provided a healthier balance sheet and effectively doubled the size of the company. We are now an even larger ‘One Stop Shop’ for defense industry customers, with more locations.”
Officials of Vintage Capital could not be reached for comment Tuesday.
While API’s corporate headquarters is in Ronkonkoma, it has major engineering and manufacturing plants in Windber, Penn.; Gloucester, U.K.; and Kanata, Ontario, Canada. API's brand names and subsidiaries include Cryptek, Emanation Control Limited, Filtran, Islip Transformer & Metal, Keytronics, National Hybrid, Secure Systems & Technologies Ltd. and Sensonics and TM systems.
Among its products are naval aircraft launching and landing equipment, instrument panels for military aircraft; and telecommunications systems for highly-classifed information. (Materials from Islip Transformer were used in the electronic device shown above.)
Kahn described the transaction as a "triangular" merger. He will become both chief executive and board chairman of API Technologies.
The transaction has already been unanimously approved by the boards of directors of both API and SenDEC, is expected to close within a matter of days. It will then apply for a listing on the Nasdaq.
API stock, currently traded over the counter, opened Monday at $4.40 and closed at $5.40. Its shares had a four-to-one reverse split on Dec. 29.
Kahn said the combined company will be more competitive in gaining U.S. Defense Department contracts and subcontracts. Over the past 12 months the combined revenues of the two companies totaled about $200 million.
"In a time where the Department of Defense is increasing its focus on security, cost effectiveness of solutions, and overall risk mitigation, we will be able to offer our customers a significant advantage as they partner with us to compete for programs," Kahn said in a prepared statement.
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