Allied Defense Soars On Revised Buyout Deal With Chemring

24th Jun 2010 14:51

DOW JONES NEWSWIRES Allied Defense Group Inc. (ADG) has reached a deal to sell most of its operations to Chemring Group PLC (CHG.LN) for $59.6 million, replacing a prior deal to buy the whole company. Shares of the ammunition company surged 60% to $4.23. Still, the stock is down 16% this year. Chemring in January agreed to buy all of Allied Defense for about $59 million, or $7.25 a share. But because of an ongoing U.S. Justice Department probe into the sector, Chemring indicated it was unwilling to purchase the entire company. As such, Chemring will now acquire the "substantially" all assets. Allied Defense won't have any "significant" operating assets after the deal. The remaining entity would work to resolve the probe, which is looking into dealings with foreign governments. Chemring, a U.K. missile-defense company, will assume certain liabilities from Allied Defense. In its latest quarterly report issued in November, Allied Defense said its loss narrowed amid cost-cutting while revenue fell 27%. -By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; [email protected] (END) Dow Jones Newswires June 24, 2010 09:51 ET (13:51 GMT)