The Selling Company: Integrated Textile Systems, Inc. manufactures innovative high strength fibers. Applications include ballistic protection, dental floss, climbing ropes, and many other applications. Over $20 million has already been invested in developing the technology, resulting in over 10 worldwide patents.
Why the company was sold: Having resolved initial production issues, the shareholders needed substantial capital resources to install high volume production lines to further penetrate the market opportunity.
Capital Alliance’s Performance: This company was operating at a loss using a prototype production line to generate testing samples and low volume production requirements for customers. Capital Alliance relied upon its considerable marketing skills to feature the technology and operations in a very positive manner because the company’s financial summaries were very weak. Capital Alliance generated several offers from strategic acquirers who had good market contacts, the needed specialized manufacturing expertise, and substantial capital available for growth.
Terms of the Transaction: Terms included cash at closing, shareholder relief of all corporate debt, and a long-term multi-phase earnout program that included an immediate $12 million commitment by the acquirer to increase the production capability of the company.
The Acquiring Company: Armor Holdings (NYSE) is a leading manufacturer and distributor of military vehicles, vehicle armor systems and life safety and survivability systems serving military, law enforcement, homeland security and commercial markets.