(RTTNews) – Shares of Avon Protection plc (AVON.L) were gaining around 6 percent in the early morning trading in London after the maker of life-critical respiratory and ballistic personal protection systems Friday announced the U.S. Defense Logistics Agency or DLA’s body armor contract.
DLA has exercised the first of the two one-year extension options under the DLA Enhanced Small Arms Protective Inserts or ESAPI body armor contract.
The exercise of the initial option extends the contract to September 22, 2022 and triggers a minimum order value for the option year of $19 million.
The exercise of the option also triggers a further $3 million of contingent consideration payable to 3M under the terms of the acquisition of the Ceradyne ballistic protection business.
The total contingent consideration payable to date would be $7 million. Additional contingent consideration will become payable on receipt of further orders in excess of the minimum order value of $19 million. The maximum total contingent consideration payable to 3M would be $25 million.
Formal product approval for the DLA ESAPI body armor is expected to be received during the first quarter of 2022 financial year, with initial shipments expected during the second quarter.
In London, Avon Protection shares were trading at 2,034 pence, up 5.50 percent.