Globe and Mail article
Allen-Vanguard shares plummet
The Canadian Press
December 10, 2007 at 11:53 AM EST
OTTAWA — Shares in Allen-Vanguard Corp. plummeted 42 per cent Monday on news that the U.S. Defence Department awarded contracts for electronic counter-measures systems, or jammers, to several of the firm's rivals.
Allen-Vanguard shares fell $3.28 to $4.61 on the Toronto stock market in morning trading — wiping out $348 million in stock value as 5.4 million shares changed hands — on word that the contracts went to Northrop Grumman, ITT and Sierra Nevada Corp.
The Ottawa-based firm, whose share price has almost quadrupled in the past year, makes equipment to deal with chemical, biological, radioactive and explosive threats, including bomb-disposal robots and equipment to jam remote detonation of terrorist bombs used in war zones such as Afghanistan and Iraq.
Through divisions of Lockheed Martin and General Dynamics, Allen-Vanguard was the incumbent in two major jammer programs in the U.S., one with the Marines and another for its Symphony electronic counter-measures (ECM) program.
Allen-Vanguard Corp.
The Globe and Mail
U.S. Homeland Security had also procured the firm's jammers.
“I think it's a just a case of the government to try and diversify and expand the potential technology base. I mean, this is just a development program ... so, I suppose from point of view, it is understandable,” CEO David Luxton said in an interview.
“We're disappointed, as are our U.S. partners, Lockheed and General Dynamics, not to be recognized.”
The $33-million development contract is to be divided among Northrop Grumman, ITT and Sierra Nevada, Mr. Luxton said.
Allen-Vanguard announced last month it had received an additional order from Lockheed Martin worth $6-million for spares in support of its ongoing Symphony program — over and above the firm's order for 1,000 Symphony units announced in July.
The firm also said in August it received an order from Lockheed Martin for 523 Symphony ECM component systems valued at about $21-million.
The order was part of a seven-year technology licence and supply agreement signed in January 2006 with Lockheed Martin.
Allen-Vanguard also acquired Ottawa-based bomb-disposal specialist Med-Eng Systems in September for $600-million.