API Technologies Corp., a provider of secure communications, electronic components and subsystems, and contract manufacturing services to the global defense and aerospace industries, and Spectrum Control Inc., a designer and manufacturer of high performance, custom solutions for the defense, aerospace, industrial, and medical industries headquartered in Fairview, PA, announced that they have entered into a definitive merger agreement providing for the cash acquisition of Spectrum by API. Upon closing of the transaction, Spectrum will operate as a wholly owned subsidiary of API.

Pursuant to the terms of the definitive agreement, API will acquire 100 percent of the issued and outstanding equity of Spectrum for $20.00 per share for a total purchase price of approximately $270 M. Spectrum's Board of Directors has unanimously approved the merger and recommends that Spectrum's shareholders vote in favor of the transaction. The transaction is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval of Spectrum's shareholders. In connection with the transaction, API has been provided with firm commitments for debt financing in a principal amount of $215 M by Morgan Stanley Senior Funding, Inc., an affiliate of Morgan Stanley & Co. Inc.

Brian Kahn, Chairman and CEO of API, stated "We are excited about the opportunity to combine with Spectrum to offer our customers an enhanced range of leading products and services to meet their evolving needs."

Richard Southworth, President and CEO of Spectrum, stated "We are pleased to deliver significant, immediate value to our shareholders through this transaction. We look forward to working with API to complete this transaction and build upon our combined strengths and capabilities."

Under the terms of the merger agreement, Spectrum may solicit acquisition proposals from third parties for a period of 40 calendar days continuing through May 7, 2011. It is not anticipated that any developments will be disclosed with regard to this process unless Spectrum's Board of Directors makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.

UBS Investment Bank is acting as financial advisor to Spectrum. Raymond James & Associates Inc. and Morgan Stanley & Co. Inc. are acting as financial advisor to API in connection with the transaction.