AirBoss of America Corp. (TSX:BOS) (the "Company" or "AirBoss"),
announced today that it has entered into an agreement to acquire
all the shares of Flexible Products Co. ("Flexible Products"), a
privately-owned U.S. company that is a leading supplier of
innovative and cost-effective anti-vibration solutions to the North
American automotive market. The acquisition is expected to be
immediately accretive to the Company's earnings and cash flows.
Flexible Products is expected to generate sales of between US$100
and $110 million and Earnings before Interest, Taxes, Depreciation
and Amortization ("EBITDA") of between US$8 and $9 million for the
year ended December 31, 2013. We welcome the management team and
employees of Flexible Products to the AirBoss group of companies
and look forward to their continuing commitment to customer
service.
AirBoss will acquire Flexible Products through an all cash
transaction valued at approximately US$51 million, subject to
working capital adjustments. The acquisition is expected to be
immediately accretive to the Corporation's earnings per share and
free cash flow per share.
"We are pleased to announce the strategic acquisition of
Flexible Products, which will provide an expanded product offering
and diversification of revenue and cash flow," said Mr. Robert
Hagerman, President and CEO of AirBoss. "We believe Flexible
Product's anti-vibration solutions are well positioned to benefit
from future trends in the automotive market, most notably the
demand for higher fuel efficiency driving the increased use of new
powertrain technologies, engine downsizing and high strength steels
and alternative materials."
Doug Reid, the President of Flexible Products stated, "I am
proud of the significant growth and development of Flexible
Products over the years. The dedication of our people has enabled
Flexible Products to become a leader in the automotive
anti-vibration solutions market and we see the sale to AirBoss as
the natural progression to further growth. Our company has had
several opportunities to accelerate its growth by supporting its
customers in other geographic regions such as Mexico, South America
and Asia. AirBoss has the scale and capital required to take
advantage of such opportunities in the future."
Acquisition Highlights
-- The all cash purchase price is approximately US$51 million, subject to
working capital changes.
-- The acquisition will be financed with debt, with the Company entering
into a new debt facility with a consortium of financial institutions and
by its existing bankers. Following completion of the transaction there
will be approximately $30 million in undrawn facilities still available.
-- Flexible Products designs, engineers and manufactures rubber and
synthetic rubber products, such as bushings, dampers, boots, and
isolators that are used to eliminate or control undesired vibration and
noise, to enhance interior comfort, quality, increase the durability of
a vehicle, and improve the overall experience of a vehicle's passengers.
-- Flexible Products has a commercial, engineering and manufacturing
presence in Auburn Hills, MI, with 311,000 square feet of manufacturing
space split between 3 facilities
-- Acquisition provides revenue and cash flow diversification within
AirBoss' Rubber Compounding segment.
Following the closing, Mr. Reid and the existing Flexible
Product's management team will continue to run the day to day
operations.
The acquisition, which is expected to close on October 16, 2013,
is subject to customary closing conditions.
National Bank Financial Inc. is acting as financial advisor to
AirBoss, while Davies Ward Phillips & Vineberg LLP is serving
as AirBoss' legal counsel. Donnelly Penman & Partners is acting
as financial advisor to Flexible Products.
Conference Call and Webcast Information
AirBoss will host a conference call and a live internet webcast
along with a slide presentation on Tuesday, October 1, 2013 at 10
am EDT to discuss the acquisition. Please follow the link on our
website or at www.marketwire.com under webcasts or dial in to the
following numbers: 416-340-2216 or Toll Free: 1-866-226-1792.
Direct Replay Access number: 1-800-408-3053.
About AirBoss of America Corp.
AirBoss of America Corp. develops, manufactures, and sells high
quality, proprietary rubber-based products offering enhanced
performance and productivity to transportation, military and
industrial markets. With a capacity to supply over 250 million
pounds of rubber annually to a diverse group of rubber
manufacturers, AirBoss is also one of North America's largest
custom rubber compounding companies. The Corporation's shares trade
on the TSX under the symbol BOS. Visit
www.airbossofamerica.com.
Forward-Looking Information:
Certain statements contained or incorporated by reference
herein, including those that express management's expectations or
estimates of future developments or AirBoss' future performance,
constitute "forward-looking statements" within the meaning of
applicable securities laws, and can generally be identified by
words such as "will", "may", "could" "expects", "believes",
"anticipates", "forecasts", "plans", "intends" or similar
expressions. These statements are not historical facts but instead
represent management's expectations, estimates and projections
regarding future events and performance.
Forward-looking statements are necessarily based upon a number
of opinions, estimates and assumptions that, while considered
reasonable by management at the time the statements are made, are
inherently subject to significant business, economic and
competitive risks, uncertainties and contingencies. AirBoss
cautions that such forward-looking statements involve known and
unknown contingencies, uncertainties and other risks that may cause
AirBoss' actual financial results, performance or achievements to
be materially different from its estimated future results,
performance or achievements expressed or implied by those
forward-looking statements. Numerous factors could cause actual
results to differ materially from those in the forward-looking
statements, including without limitation: impact of general
economic conditions; its dependence on key customers; cyclical
trends in the tire and automotive, construction, mining and retail
industries; sufficient availability of raw materials at economical
costs; weather conditions affecting raw materials, production and
sales; AirBoss' ability to maintain existing customers or develop
new customers in light of increased competition; changes in
accounting policies and methods, including uncertainties associated
with critical accounting assumptions and estimates; changes in the
value of the Canadian dollar relative to the US dollar; changes in
tax laws and potential litigation; ability to obtain financing on
acceptable terms; environmental damage caused by it and
non-compliance with environmental laws and regulations; potential
product liability and warranty claims and equipment malfunction.
This list is not exhaustive of the factors that may affect any of
AirBoss' forward-looking statements.
All of the forward-looking information in this press release is
expressly qualified by these cautionary statements. Investors are
cautioned not to put undue reliance on forward-looking statements.
All subsequent written and oral forward-looking statements
attributable to AirBoss or persons acting on its behalf are
expressly qualified in their entirety by this notice.
Forward-looking information contained herein is made as of the date
of this press release and, whether as a result of new information,
future events or otherwise, AirBoss disclaims any intent or
obligation to update publicly these forward-looking statements
except as required by applicable laws. Risks and uncertainties
about AirBoss's business are more fully discussed in the
Management's Discussion and Analysis of Financial Condition and
Results of Operations in the 2012 Annual Report to Shareholders
under the heading "Risk Factors".
Contacts: AirBoss of America Corp. R.L. Hagerman CEO
905-751-1188 AirBoss of America Corp. Robert Dodd Executive VP
905-751-1188 AirBoss of America Corp. Stephen Richards CFO
905-751-1188 www.airbossofamerica.com
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