Arotech Buys UEC Electronics; Expects 2014 Revenues $117 Mln - $123 Mln

(RTTNews) - Arotech Corp. (ARTX) announced that it has acquired UEC Electronics, LLC, a company based in Hanahan, South Carolina. The company said that UEC will be integrated into its Battery and Power Systems Division.

The initial acquisition price of UEC under the contract entered into with the seller of UEC consisted of $28.0 million in cash and 775,000 shares of Arotech's common stock, plus a potential earn-out of $5.5 million over the next two calendar years. On March 31, 2014, the closing price of Arotech's common stock on the Nasdaq Global Market was $6.22 per share, causing the common stock issued in the acquisition to be valued for accounting purposes at $4.82 million, subject to potential reduction to reflect the fact that the stock being issued in the acquisition is unregistered and not freely tradable.

Arotech's primary bank has funded $22.5 million of the cash requirement ($18.0 million at a 2014 rate of LIBOR plus 3.75% and $4.5 million at a 2014 rate of LIBOR plus 5.5%), which Arotech expects to pay back over the next five years out of its operating cash flow.

UEC develops and manufactures electronic components and subsystems primarily for military, aerospace and industrial customers. UEC specializes in core, proprietary engineering capabilities in highly-demanded solution areas, including: hybrid power generation systems, smart power subsystems for military vehicles and dismounted applications, and aircraft and missile systems support for cutting-edge weapons and communications technologies.

For the full year 2014, including UEC's results for the last nine months of 2014, Arotech expects revenues to be between $117 million and $123 million, and EBITDA to be in the range of between $8.0 million and $8.5 million.