(Reuters) – Protective Products of America Inc (PPA.TO), a maker of bulletproof vests and body armor, sought protection under Chapter 11 of U.S. bankruptcy code and said it agreed to sell most of its assets to a private equity firm for about $8 million.
An affiliate of private equity firm Sun Capital Partners Inc will also assume certain specified liabilities and set the floor at an auction supervised by the bankruptcy court, court papers showed.
The company said the deal was subject to a higher and better offer by another party in about 35 days and that it intends to maintain all normal business operations throughout the bankruptcy process.
The deal with Sun Capital allows PPA to retain certain assets, including some avoidance actions and tax refunds, which it believes are worth about $5.5 million, the company said in a court filing.
“The reorganization and acquisition will eliminate PPA’s funded indebtedness and substantially reduce its other liabilities,” the company said in a statement.
In its Chapter 11 petition filed in a Florida bankruptcy court, PPA listed both assets and debt in the range of $10 million to $50 million.
Sunrise, Florida-based PPA employs about 350 people, according to the company’s website.
The company makes lightweight ceramic armor for vehicles and military personnel, composite based products and concealable soft body armor products for law enforcement and the Modular Tactical Vest (MTV) ballistic system for military personnel.
The case is In re: Protective Products of America Inc, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale), No. 10-10711. (Reporting by Santosh Nadgir; Editing by Gopakumar Warrier)