25th Mar 2020 10:41
(Alliance News) - Avon Rubber PLC said Wednesday it was won a fixed price contract to supply the US Defense Logistics Agency with Enhanced Small Arms Protective Inserts, which are body armour plates.
The framework contract has a maximum value of USD333 million over a base duration of 18 months, with two further one-year extension options. The minimum value of this contract stands at USD19 million.
The first order of the contract is expected to take place shortly, with deliveries set to start in early 2021.
The body armour plates are a product that came from safety and consumer goods firm 3M Co's Ceradyne ballistics-protection business, acquired by Avon Rubber in early January.
The award of the contract triggers USD3 million of the contingent consideration payable to 3M under the terms of the acquisition announced in August. Additional contingent consideration will become payable on receipt of orders under this contract, with the maximum total contingent consideration payable to 3M being USD25 million.
"This is another significant, multi-year body armor contract for Avon Protection in addition to the 2 existing US Army Vital Torso Protection contracts and represents further encouraging momentum in our newly acquired ballistic protection business," said Chief Executive Officer Paul McDonald.
"This further strengthens the medium term outlook and visibility for Avon Protection and demonstrates our ongoing position as a leading provider of body armor to the US armed forces," McDonald added.
Shares in Avon Rubber were down 3.0% at 2,483.0 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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