Aldila Inc., the golf equipment company, has completed its acquisition of substantially all of the assets of Miramar Strategic Ventures, LLC (MSV) used in its Victory Archery line of carbon fiber arrows and related archery products. The transaction closed on Dec. 30, 2010.
Aldila, acting through its subsidiary Aldila Golf Corp.,
acquired substantially all of Victory Archery, a division of
MSV. Included in the purchase were specified equipment, accounts
receivable and inventory, as well as other tangible and intangible
assets related to the archery line of business. Aldila assumed four
contracts relating to sales and marketing activities and will be
responsible under those agreements only for post-closing
obligations. Aldila assumed no other liabilities in connection with the
purchase.
Aldila paid $2.3 million dollars and issued 104,319 shares of
unregistered Aldila, Inc. common stock to MSV in payment for the
assets.
Aldila will also pay MSV an earn-out payment of 5.0% of any
increase in quarterly gross sales (less returns) of archery products,
with an annual reconciliation payment to bring the total earn-out
payment to 10.0% of the increase above the gross sales (less returns) of
archery products compared to the actual gross sales (less returns) in
2010. The earn-out obligation ends for sales after Dec. 31, 2015.
The number of shares was calculated using the average of the
closing price on the 20 trading days prior to December 29, 2010 and a
value of $500,000, yielding a price of $4.793/share.
MSV, Martin Connolly, Tod Boretto and Spinergy, Inc., a
Delaware corporation, all entered into non-competition agreements
pursuant to which they will not compete, directly or indirectly, with
Aldila in the manufacture or sale of carbon fiber arrows and related
archery products worldwide for six (6) years after the closing. Connolly and Boretto are key management employees of MSV and,
together with Spinergy collectively own 38.33% of that company.
Connolly and Boretto have also, with MSV's consent, entered into
consulting agreements with Aldila to assist in the transition.
Aldila granted MSV a right of first negotiation if Aldila
ceases to actively conduct the archery business at any time before
Dec. 31, 2015.
