Allen-Vanguard executes binding agreement with affiliate of Versa Capital Management to go private

    -   Allen-Vanguard to continue as going concern with stable capital
        structure, significantly strengthened liquidity and financial
        position and no interruption of operations or supplier relationships

    -   Transaction will result in revised multi-year credit agreement and
        retirement of a portion of Allen-Vanguard's senior debt

    -   Allen-Vanguard's senior lenders will make new revolving credit and
        documentary credit facilities available to it

    OTTAWA, Sept. 12 /CNW Telbec/ - Allen-Vanguard Corporation (TSX: VRS)
("Allen-Vanguard" or the "Company") of Ottawa, Canada, Versa Capital
Management, Inc., a Philadelphia-based private equity investment firm, and the
Company's senior lenders (the "Lenders") today announced the execution of an
agreement pursuant to which Allen-Vanguard will become a 100%-owned affiliate
of investment partnerships managed by Versa Capital Management, Inc.
(collectively, "Versa").
    Versa will provide both equity and debt capital to Allen-Vanguard. This
will permit the restructuring and reduction of Allen-Vanguard's existing
senior secured credit facilities and their replacement with a multi-year
credit agreement and afford the Company significant flexibility to pursue its
business plan. Certain of the Lenders will make available a new revolving
credit facility and documentary credit facility to Allen-Vanguard.
    The transaction agreement provides that the Company's obligations to
trade creditors shall be unaffected and will continue to be paid or satisfied
in the ordinary course. Similarly obligations to employees also will be
unaffected. All shares, options, restricted stock, warrants and other
securities in Allen-Vanguard and any related rights will be cancelled on
closing of the transaction, with no consideration paid to holders. Closing of
this transaction is subject to closing conditions customary for a transaction
of this nature, including any required regulatory or court approvals.
    "This announcement marks the end of an exacting, year-long process of
recapitalizing the Company in order to execute our business plan going
forward," said David E. Luxton, President and CEO of Allen-Vanguard. "This
process took place during a period of extremely difficult credit and equity
markets, and a concurrent decline in the Company's financial performance.
While we received several overtures during this past year, Versa was the only
party able to conclude definitive terms. Under Versa's ownership,
Allen-Vanguard will continue to conduct its business in the ordinary course,
with management and the new board focused on global business opportunities.
This follows the progress that we have made over the last year to right-size
the Company, to expand and diversify the Company's proprietary products and
services, and to serve major customers around the world, who continue to rely
on the Company's leading and proprietary technologies."
    "We are very pleased to have come to an agreement with Allen-Vanguard and
its Lenders. Allen-Vanguard possesses the world's leading technologies in the
counter-terrorism market and we are, ourselves, deeply committed to the
provision of these mission-critical technologies," said Gregory L. Segall,
Managing Partner of Versa Capital Management, Inc. "This recapitalization is a
substantial accomplishment for Allen-Vanguard, and we look forward to working
with members of the management team as they return their full focus to
executing their business plan in concert with key partners, customers and
other stakeholders."
    There are no plans to move the Company's head office from Ottawa, Ontario
or its operations in Canada, the United States or the United Kingdom.

    Forward-looking statements

    This press release may contain forward-looking statements, which reflect
Allen-Vanguard's or Versa's current expectations regarding future events, its
strategy, expected performance and condition. Forward-looking statements
include statements that are predictive in nature, that depend upon or refer to
future events or conditions, or that include words such as "expects,"
"anticipates," "plans," "believes," "estimates" or negative versions thereof
and similar expressions. In addition, any statement that may be made
concerning future performance, strategies or prospects, and possible future
investments, acquisitions or dispositions, is also a forward-looking
statement. Forward-looking statements are based on current expectations and
projections about future events and are inherently subject to, among other
things, risks, uncertainties and assumptions about the Company and economic
factors. Forward-looking statements are not promises or guarantees of future
performance, and actual events and results could differ materially from those
expressed or implied in any forward-looking statements made about the Company.
Any number of important factors could contribute to these digressions,
including, but not limited to, general economic, political and market factors
in North America and internationally, interest and foreign exchange rates,
global equity and capital markets, business competition, technological change,
changes in government regulations, unexpected judicial or regulatory
proceedings, and catastrophic events. We stress that the above-mentioned list
of important factors is not exhaustive. We encourage you to consider these and
other factors carefully before making any investment decision and we urge you
to avoid placing undue reliance on forward-looking statements. Further, you
should be aware that the Company disclaims any obligation to publicly update
or revise any such forward-looking statements whether as a result of new
information, future events or otherwise, prior to the release of the next
Management Discussion and Analysis to be released by the Company or except as
required by law.

    About Versa Capital Management

    Versa Capital Management, Inc. is a private equity investment firm with
over $900 million of committed capital focused on control investments in
special situations involving middle market companies in a wide variety of
industries throughout North America. More information can be found at

    About Allen-Vanguard

    Allen-Vanguard Corporation supports the mission of military and homeland
security forces around the world with leading proprietary solutions for
protection and counter-measures against hazardous devices of all kinds,
whether chemical, biological, radiological or explosive ("CBRNE"), including
improvised explosive devices (IEDs) and remotely controlled IEDs ("RCIED"s).
Allen-Vanguard equipment is in service in more than 120 countries. Products
include Electronic Counter-Measures ("ECM") equipment for jamming remote
detonation of terrorist devices, specialty security equipment for Explosive
Ordnance Disposal ("EOD"), remote intervention robots for hazardous
applications, and personal protective wear for use in dealing with explosive
and bio-chemical agents. Allen-Vanguard is the developer and/or sole,
worldwide licensee of proprietary technologies such as the Med-Eng bomb suit,
the Defender(TM) and Vanguard(TM) Mk2 bomb disposal robots, and the Universal
Containment System and CASCAD Foam system for blast mitigation and
decontamination of bio-chemical warfare agents. Professional services
encompass counter-IED intelligence, training and advisory services, including
the Triton(TM) Report on terrorist incidents around the world. The Company
operates globally through its wholly-owned subsidiaries under the names
"Allen-Vanguard", "Med-Eng" and "Hazard Management Solutions". Head office
operations are located in Ottawa, Ontario, Canada, with manufacturing
operations in Pembroke, Ontario; Ogdensburg, New York; and Tewkesbury, U.K.
The Company has professional services operations in Shrivenham, UK, Canada and
in the U.S. in Arlington, Virginia, plus sales offices in Canada, the U.S.,
the U.K. and Asia. Allen-Vanguard's shares are listed on The Toronto Stock
Exchange (TSX) under the symbol "VRS". To find out more about Allen-Vanguard
Corporation (TSX: VRS), visit our website at

    %SEDAR: 00018026E

For further information:

For further information: on Versa Capital Management: Kristy Lash,
Gregory/FCA, (610) 642-8253 x 144; For further information on Allen-Vanguard:
Robin Sundstrom, (647) 822-8111,

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