One of the co-founders of Med-Eng, an Ottawa-based manufacturer of bomb disposal equipment, said he’s thrilled that the brand he used to run has been sold.
By Jacob Serebrin
Defence contractor Allen-Vanguard, an American-owned company with offices in Ottawa, announced Monday that it is selling two business units to the Safariland Group, a Florida-based manufacturer of products for military and law enforcement.
Included among them was the Med-Eng brand, which Allen-Vanguard acquired in 2007 for $650 million.
Richard L'Abbe, who co-founded Med-Eng in 1981, said it was hard for him to comment on the details because he’s been away from the business since the sale.
But he is nevertheless optimistic.
“I hope the new ownership can inject new life into this formerly extraordinary company,” said Mr. L’Abbe, who was OBJ’s CEO of the year in 2003. “Safariland and its financial backers are solid and competent. This should be good news for the Med-Eng brand.”
He said he hopes “that Safariland will choose to maintain the core of expertise held by Med-Eng in its [explosive ordinance disposal] and thermal management groups here in Ottawa and Pembroke. This expertise was world class in 2007, and is very difficult to duplicate.”
Warren B. Kanders, CEO of Safariland, told OBJ that he plans to keep the current employees at the former Allen-Vanguard business units, including the Med-Eng operations, and said the “engineering capabilities” at those businesses “are unparalleled.”
Shortly after the 2007 acquisition, Allen-Vanguard began struggling with debt and share prices tumbled. Philadelphia-based private equity firm Versa Capital Management bought the company in 2009. While Versa Capital took over the company’s debts, shareholders were left with nothing.
Allen-Vanguard is currently pursuing a lawsuit against the former owners of Med-Eng, including Mr. L'Abbe, claiming that Med-Eng managers made fraudulent claims to increase the value of the company. In May a superior court judge gave the company permission to raise their claim to $650 million – the full purchase price of Med-Eng.
Allen Vanguard CFO Kent Rosenthal said that the sale of the Med-Eng business will not affect the ongoing lawsuit.
"We continue to pursue it vigorously," he said.
Editor's note: This is a corrected story. An earlier version suggested that a class action lawsuit against Allen-Vanguard is still ongoing. That case has been dismissed.