The arrangement had been overwhelmingly approved by shareholders from both companies in late December, as well as the firms' board of directors.
Debt-ridden PSP, a soft-armour maker, will now have minority ownership in the deal as Zuni takes control of 54.2 per cent of the company.
There was no statement regarding PSP's operations under a forbearance from its bank, which is slated to conclude no earlier than Feb. 28.
"The company is renewing its momentum. The PSP-Zuni merger squarely addresses the path to achieve financial stability," PSP chief executive Doug Lucky stated in November, when the boards of directors approved the deal.
"Combine that with the launch of our new NIJ.06-certified body armour product lines and customer wins – including the recent order worth over US$2 million for tactical body armour – and you can see evidence the company is asserting itself in the market in order to create shareholder value."
Pacific's last disclosed quarter, which covered the period up to Sept. 30, showed an almost 50-per-cent drop in sales to $4.3 million in the first quarter from $7.6 million the year before.
Adjusted earnings before interest, taxes, depreciation and amortization fell to a $400,000 loss over a $300,000 loss in 2009.
PSP's profits fell after the company left the west coast for Ottawa, a move that was supposed to place it closer to its competitors and better keep an eye on them.
Its board of directors made attempts to rectify the situation in 2010.
Previously that year, shareholders rebuffed a $4.6 million offer from Revlon Eyewear Inc. to take over the company, as well as a subsequent offer to buy PSP's headborne system for $1.275 million.
Revlon later bought the helmet-liner portion of the system for $275,000 and a four-per-cent royalty on gross sales, and in a separate transaction got the rest of the system for a further $100,000.
The Kanata company's chief financial officer and board of directors left the company in late August.
PSP further raised cash late in 2010 with a $1 million private placement.
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