Bay Shore defense contractor Air Industries Group seeks merger with Mississippi air services provider
Bay Shore-based Air Industries Group would combine with Tenax Aerospace in Ridgeland, Miss., according to the terms of a proposed merger. Credit: Newsday/J. Conrad Williams Jr.
A Bay Shore-based manufacturer of landing gear for military aircraft is proposing a multimillion-dollar merger with a Mississippi company that provides planes to the federal government for use in military surveillance and fighting fires.
Air Industries Group, a public company with shares traded on the NYSE American exchange, would combine with Tenax Aerospace, which is privately held and based in Ridgeland, Mississippi.
The stock deal, valued at between $250 million and $500 million, still must be approved by Air Industries’ shareholders and could close by June 30, according to securities filings.
Together, the businesses would have the capability to offer more goods and services than if Air Industries and Tenax remain separate, executives said in announcing the proposed merger.
The deal would produce "a stronger combined company with a broader range of aerospace and defense products, and the benefits of additional expertise and resources," said Peter Rettaliata, chairman of the Air Industries board.
Air Industries, with a total workforce of 160 employees, is among Long Island’s largest aerospace and defense manufacturers. It’s also one of the few with shares traded on a stock exchange.
The Island, together with Queens and Brooklyn, is home to more than 400 defense firms that employ 25,000 people and generate economic activity of $8 billion to $10 billion annually, according to the Uniondale-based trade group Aerospace & Defense Diversification Alliance in Peacetime Transition, also known as ADDAPT.
"Air Industries builds some super high-dollar, high-value, high-engineering projects that support aircraft and naval programs," said John Spiezio, board chair of ADDAPT, referring to components made by the company for F-35 Lightning and E-2D Advanced Hawkeye combat aircraft and Sikorsky helicopters, among others.
He said Air Industries depends on local suppliers for materials and services and is known for its engineering staff.
"Besides the people working on the shop floor, they are keeping engineering alive and well, and innovation alive and well, in the local defense industrial base," Spiezio said Tuesday.
The combined company would have 430 employees and is expected to report a pretax profit of more than $75 million for this year on revenue of more than $210 million, the securities filings show.
The combined company would continue to be listed on the NYSE American, with 95% of the stock held by Tenax investors after 112.5 million shares are issued to them.
Scott Glassman, Air Industries’ acting chief executive and president, declined to comment Monday, saying the company must first release a preliminary proxy in advance of the shareholder vote.
Tenax provides a range of aviation services to the U.S. and Canadian governments including fighting forest fires from the air and reconnaissance of potential enemies. The company, through a spokesperson, declined to comment Monday.
Joining with Air Industries "provides Tenax with a public listing for its shares, manufacturing capability, and access to permanent capital to support long-term growth," Tom Foley, the Tenax chairman who would become chairman of the combined company, said when the merger was announced in February.
The combined company would have six or more board members chosen by Tenax and two jointly selected by Tenax and Air Industries, according to securities filings.
Tenax was family owned until 2018 when it was purchased by an investment firm, NTC Group of Greenwich, Connecticut, for $218 million.
The proposed merger comes in the wake of Air Industries reporting losses for the past four years and notification from Webster Bank that it will not renew the company’s line of credit, the filings show.
Air Industries has about $30 million in debt, which Tenax has agreed to assume, according to the filings.
Air Industries reported a loss of $1.3 million last year on revenue of $48 million.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
Sarra Sounds Off, Ep. 28: Baseball, Softball and Plays of the Week! On the latest episode of "Sarra Sounds Off," we check in with Matt Lindsay at Mount Sinai and their new baseball coach Eric Strovink, Chris Matias is with the Floral Park softball team and their star pitcher Chloe Zielinski and Jared Valluzzi has the plays of the week.
Sarra Sounds Off, Ep. 28: Baseball, Softball and Plays of the Week! On the latest episode of "Sarra Sounds Off," we check in with Matt Lindsay at Mount Sinai and their new baseball coach Eric Strovink, Chris Matias is with the Floral Park softball team and their star pitcher Chloe Zielinski and Jared Valluzzi has the plays of the week.
