Aims To Expand US- And Mexico-Based Manufacturing Capabilities

Ballistic Recovery Systems Inc. announced Wednesday it has entered into a non-binding Letter of Intent for the establishment of Advanced Tactical Fabricators (ATF), a subsidiary to be partially owned by Minnesota-based Head Lites Corporation following fulfillment of certain pre-conditions.

The new company would acquire reflective components/trims assets of Head Lites Corporation and establish operations in St. Paul, MN; Pine Bluff, NC and Tijuana, Mexico. Completion of the transaction is pending due diligence investigations; the definitive agreement is expected to be completed by the end of this year, according to BRS.

"This acquisition would reinforce our commitment to capitalize on what we believe are attractive long-term growth prospects in textile fabrication for aviation and non-aviation applications," said BRS CEO Larry E. Williams. "BRS believes that ATF would play a pivotal role by combining the strengths of BRS and Head Lites’ and could immediately improve our opportunity for top line growth and operational efficiencies.”

ATF would focus on the growing opportunity for textile fabrication operations and meet the need for United States-based sewing for parachutes and other products related to US Department of Defense work. Head Lites is a leader in the reflective safety products and had 2006 revenues of more than $3.5 million.

"This agreement would merge the strong brands, technical expertise and market presence of our two companies," said Head Lites President Gary Lesley. "We also expect to achieve substantial synergies to further enhance the already profitable Vis-Mat, Vis-Tac and Head Lites brand components/trims business."

"We see our activities in establishing ATF as forming a very important part of our businesses diversification strategy," added BRS Chairman Robert L. Nelson.

Williams told ANN the company hopes to build on "the wealth of experience and expertise which we have accumulated from our BRS textile fabrication activities in Tijuana" to further the BRS business line.

"The focus of ATF would broaden from our traditional ones -- whole airplane parachutes -- to include non-aviation safety applications," Williams added. "This transaction, if consummated, together with other projects previously announced by us, is ample evidence that we have the ability to overcome complexities and generate attractive business opportunities in other areas, therefore accomplishing our diversification strategy."

In addition to providing the CAPS recovery system (shown above) for all Cirrus SR-series aircraft, BRS also offers whole-airplane parachute recovery systems for a variety of general aviation and light-sport aircraft. The company will also provide parachute recovery systems for the upcoming Cirrus "the-jet," as well as Diamond's upcoming DA50 large single-engine piston aircraft, and the Diamond D-Jet.

FMI: www.brsparachutes.com, www.headlites.com/