Precision Aerospace & Defense Group Inc (PAD) investor relations material

Deal rationale and strategic fit

• The merger creates a Nasdaq-listed holistic solutions provider in aerospace, defense, and space, leveraging proven profitability, strong cash flow, blue-chip customer relationships, and a robust backlog.

• The combined entity will focus on engineering, manufacturing, and advanced testing solutions for government and commercial clients, targeting generational growth in modernization and space.

• Strategic fit is enhanced by a history of accretive acquisitions and a pipeline targeting specialized capabilities, with minimal overlap and immediate accretion.

• PAD's multi-division platform delivers mission-critical products and services, supporting military, commercial aviation, and space infrastructure.

Financial terms and conditions

• Transaction values the company at up to $320 million implied enterprise value, assuming a $10.00 per share price and pending acquisitions.

• Acquisitions are made at 5–7x EBITDA multiples, using a mix of cash and stock to incentivize management teams to stay and grow.

• 2025 pro forma sales are projected to surpass $70M with $14.4M EBITDA; 2026 targets are $85M revenue and $16.2M EBITDA organically, and $129M revenue with $25M EBITDA including acquisitions.

• PAD entered a non-binding term sheet for up to $80 million in credit facility and equity financing, subject to due diligence and definitive agreements.

• FACT's trust account holds approximately $175 million in gross proceeds, subject to redemptions, and PAD shareholders expected to own about 59% of the combined company post-merger.

Synergies and expected cost savings

• Incoming capital will support balance sheet optimization, planned acquisitions, and future growth initiatives.

• Acquired companies are profitable standalone, with no need for restructuring or right-sizing.

• 30%+ available plant capacity allows for growth without additional CapEx.

• Cross-selling and solution-provider strategy expected to drive incremental growth.

• Additional cash is expected to fund general corporate purposes and position the company for robust growth post-closing.