American Pacific Reports Investment in Explosives Business
Wednesday December 11, 3:28 pm ET
LAS VEGAS, Dec. 11 /PRNewswire-FirstCall/ -- American Pacific Corporation (Nasdaq: APFC - News) today reported that it had made an investment of approximately $10.7 million in Energetic Systems Inc., LLC ("ES"), a joint venture entity formed to acquire and manage a fully operational commercial explosives business.
The form of the investment in ES is a combination of term debt, preferred stock and common equity. The investment was made and will be held by the Company's newly organized, wholly-owned indirect subsidiary, Energetic Additives Inc., LLC ("EA"). EA holds a 50% equity interest in ES. The remaining 50% equity interest is held by a private entity with extensive experience in the explosives industry.
ES today completed the purchase of certain assets and the assumption of certain liabilities of Slurry Explosives Corporation and Universal Tech Corporation (collectively "SEC/UTC"), subsidiaries within LSB Industries, Inc. SEC/UTC is involved in the manufacture and distribution of commercial explosives, and is a respected research, development and testing organization specializing in the development and testing of products and processes for commercial explosives and energetic compounds. The Company will account for it's investment in ES using the equity method of accounting. Over the past five years ended December 31, 2001, SEC/UTC has generated normalized (excluding unusual and non-recurring items) annual earnings before interest and taxes of between $1.4 million and $1.7 million |
