AirBoss of America has formed AirBoss Defense Group (ADG) through the merger of its AirBoss Defense business and other operations in Acton Vale, QC with Critical Solutions International (CSI).
CSI is a privately owned U.S.-based company and is a global supplier of route clearance vehicles; countermine capability and survivability products to U.S. and foreign military forces.
AirBoss has contributed the shares of AirBoss Engineered Products and the membership interests of Immediate Response Technologies to newly formed Canadian and U.S. entities that will form ADG. Critical Solutions Holdings has contributed all the shares of CSI to the newly formed business.
To satisfy the conditions on closing, ADG provided AirBoss with a vendor takeback note valued at $60 million. The note is secured against the assets and equity of ADG and matures on January 1, 2026.
In connection with the closing of the ADG transaction, AirBoss has also amended its senior secured credit facilities to, among other things, add the U.S. and Canadian AirBoss Defense entities as borrowers under the credit facility. This revision will provide ADG with to up to $15 million in revolving credit facilities, which are intended to provide the newly merged business with the access to capital necessary to achieve its objectives. The syndicate of lenders will continue to consist of TD Bank, National Bank of Canada, Comerica Bank and JPMorgan.
Aggregate availability under the credit facilities will be approximately $120 million, consisting of a $60 million term loan, a $60 million revolving credit facility and an accordion feature of up to an additional $50 million of availability, upon the satisfaction of customary conditions for such features. The maturity date of the facilities is January 2, 2023. As of January 2, 2020, the revolving credit facility was undrawn.
“Allowing ADG to access borrowing capacity under AirBoss’ senior secured credit facilities provides the new entity flexibility in the execution of its growth strategy plus an enhanced ability to manage through periods of variability inherent to the defense business,” said Daniel Gagnon, CFO of AirBoss. “By leveraging AirBoss’ solid balance sheet, ADG has access to capital at a more favorable rate than it could secure independently.”
Houlihan Lokey Capital acted as financial advisor to AirBoss, while Davies Ward Phillips & Vineberg is served as AirBoss’ legal counsel, with Hogan Lovells serving as U.S. regulatory counsel. Kirkland & Ellis served as legal counsel to CSI and CSH, with Stikeman Elliott serving as Canadian legal counsel.
AirBoss of America is a group of complementary businesses using compounding technology and engineering expertise to create value for its customers.