PPK Group (ASX:PPK) entered into a binding, conditional share sale and purchase agreement to divest its entire 39.85% stake in Craig International Ballistics.
The interest, held through PPK's subsidiary BNNT Ballistics, is being acquired by Mehler Vario Systems.
The transaction is structured around a headline enterprise value of $86 million for 100% of CIB on a cash-free and debt-free basis.
Under the terms of the agreement, PPK is set to receive a headline purchase price of $27.5 million.
The deal also includes a performance-based earn-out component capped at $6 million, potentially bringing the total proceeds for PPK to $33.4 million.
To trigger the earn-out, CIB must achieve an average adjusted recurring EBITDA exceeding $12 million per year across the 2026 and 2027 calendar years.
If the financial milestones are met, the payment will be issued in the second quarter of 2028.
Completion of the sale is subject to standard closing conditions, including regulatory approvals under the Foreign Acquisitions and Takeovers Act 1975 and the finalisation of warranty and indemnity insurance.
Both parties have established a sunset date of June 30, 2026, for these conditions to be satisfied or waived.
The divestment marks a pivotal shift for PPK Group as it realigns its portfolio, with the transaction expected to conclude by mid-2026.
At the time of reporting, PPK Group's share price was $0.37.