Pacific Safety Products Inc.

Pacific Safety Products Inc.

May 01, 2007 06:00 ET

Pacific Safety Products Inc. Completes Gator Hawk Asset Acquisition

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - May 1, 2007) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") announced today that it has completed its previously announced acquisition (the "Acquisition") of the assets of Gator Hawk Armor Inc. ("Gator Hawk") for consideration of approximately USD$3.85 million. As announced previously, Thomas "Scotty" Wylie will immediately join PSP as President of Gator Hawk and the PSP operations in the U.S.A.

David Scott, CEO of PSP, stated, "We are very excited about the addition of the Gator Hawk brand and products to our armor portfolio. Gator Hawk has a well-earned reputation for being customer-focused and a quality supplier. With the full complement of armor products and the distribution sales network of Gator Hawk in the U.S.A., PSP expects to leverage this into improved results in both market penetration, sales growth and fiscal performance. Scotty Wylie has played a critical role in establishing the Gator Hawk brand and we are very much looking forward to working with him in his new role."

Closing of the Acquisition was subject to U.S. Federal Court approval in connection with receivership proceedings of one of Gator Hawk's preferred shareholders. The required Court approval of the Acquisition was received on April 25, 2007, thereby facilitating completion of the Acquisition by the original anticipated deadline of April 30, 2007.

Financing for the Acquisition was obtained in part by way of a private placement offering of subscription receipts ("Subscription Receipts") exchangeable for common shares of the Company ("Common Shares") upon the completion of the Acquisition. The Gator Hawk purchase price consideration of USD $3.85 million was funded by a combination of USD $3,465,000 in cash and USD $385,000 in Common Shares of PSP valued at CAD$1.00 per share. In addition to the purchase price, the agreement includes an "earn-out" of up to USD $300,000 based on certain revenue targets of the Gator Hawk product line being achieved in fiscal 2008.

As the Acquisition has now closed, a total of 4.5 million Subscription Receipts will be automatically exchanged for Common Shares. These Common Shares will be issued and recorded today on the register of PSP's Common Shares and will be subject to a hold period expiring on July 28, 2007. Pursuant to the Acquisition asset purchase agreement (the "Asset Purchase Agreement"), the Common Shares issued to Gator Hawk as part of the Acquisition purchase price are subject to a 12-month escrow period as collateral security for certain potential contractual breaches under the Asset Purchase Agreement.


The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely™. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armor to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest armor manufacturer in Canada and supplies its products to the Canadian Department of Defence, Federal Government Agencies and major law enforcement organizations across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armor products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits.

Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.

Forward-Looking Statements

This news release contains certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in this document include statements regarding the intent, belief or current expectations of the Company with respect to the acquisition of Gator Hawk. There are no assurances that the Acquisition will be accretive to the Company or that the business acquired will be successfully integrated into PSP's current business.

Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include: failure to successfully negotiate or subsequently close such transactions, inability to obtain required shareholder or regulatory approvals, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of shareholder, regulatory and governmental approvals for Pacific Safety's proposed transactions, and the ability of management to successfully consummate the proposed transactions. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pacific Safety Products Inc.
    David Scott
    Chairman and Chief Executive Officer
    (250) 491-0911 or 1-888-PSP-ARMR (1-888-777-2767)
    (250) 491-0930 (FAX)
    Website: Website: