Avon Protection plc is pleased to confirm the U.S. Defense Logistics Agency (“DLA”) has exercised the first of the two one-year extension options under the DLA Enhanced Small Arms Protective Inserts ("ESAPI") body armor contract.
The exercise of this initial option extends the contract to 22 September 2022 and triggers a minimum order value for the option year of $19 million.
The exercise of the option also triggers a further $3 million of contingent consideration payable to 3M under the terms of the acquisition of the Ceradyne ballistic protection business, as announced on 7 August 2019. This brings the total contingent consideration payable to date to $7 million. Additional contingent consideration will become payable on receipt of further orders in excess of the minimum order value of $19 million, with the maximum total contingent consideration payable to 3M being $25 million.
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First article testing has progressed in line with the Company’s expectations and formal product approval for the DLA ESAPI body armor is expected to be received during the first quarter of our 2022 financial year, with initial shipments expected during the second quarter.
Commenting, Paul McDonald, Chief Executive Officer, said:
"I am pleased with the progress the business has made since December to address the delays experienced in obtaining DLA ESAPI product approval.
This contract extension demonstrates our ongoing position as a leading supplier of body armor to the U.S. armed forces, as well as underpinning our FY22 body armor revenue expectations."
Source: Avon Protection
Date: Sep 24, 2021
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