Tenax Aerospace Acquisition, LLC (“Tenax”) and Air Industries Group have jointly announced the signing of a definitive Agreement and Plan of Merger that will unite Tenax’s special mission aviation platform with Air Industries Group’s precision aerospace manufacturing operations, creating a significantly larger and more diversified aerospace and defense enterprise positioned to serve both government and commercial customers across multiple mission-critical segments; following completion of the transaction, the combined company is expected to continue trading on the NYSE American under the ticker symbol AIRI, preserving public market access while expanding operational scope and financial scale.
Strategic Combination Creates a Diversified Aerospace and Defense Platform
The merger brings together two complementary aerospace businesses with distinct yet synergistic capabilities, as Tenax has developed a specialized focus on special mission aviation services and aircraft operations while Air Industries Group has built a long-standing reputation for precision-engineered components and assemblies supporting major aerospace and defense programs; by integrating aviation services, aircraft asset management, and advanced manufacturing under one corporate umbrella, the combined organization will benefit from enhanced vertical integration, cross-selling opportunities, broader contract eligibility, and improved operational resilience, all of which are expected to strengthen competitive positioning in a dynamic aerospace and defense marketplace.
The leadership teams of both organizations view the transaction as a transformative step that accelerates growth ambitions, improves access to long-term capital, enhances manufacturing capabilities supporting aviation platforms, and establishes a more balanced revenue mix between service-driven and manufacturing-driven streams, thereby reducing concentration risk and creating a foundation for sustained value creation.
Financial Profile and Preliminary 2025 Performance
Based on preliminary and unaudited financial results for the fiscal year ended December 31, 2025, the combined company would have reported approximately $183.3 million in total revenue alongside Adjusted EBITDA of approximately $65.0 million, reflecting the earnings power of the integrated platform and demonstrating the margin profile associated with Tenax’s special mission aviation operations when combined with Air Industries Group’s precision manufacturing base; these figures underscore the scale achieved immediately upon closing and highlight the financial leverage inherent in the combined business model.
At present, the merged entity would carry net debt of approximately $380.0 million, a figure that includes $80.0 million in additional debt incurred in January 2026 as part of a refinancing transaction undertaken by Tenax to purchase minority membership interests, thereby simplifying ownership and consolidating equity prior to the merger; management anticipates that net debt at closing could be as much as $30.0 million lower than the current level due to projected operating cash flow generation and the anticipated sale of Tenax aircraft presently classified as held for sale, actions that are expected to improve leverage metrics and enhance balance sheet flexibility.
Pro-Forma 2026 Outlook Signals Accelerated Growth
Looking ahead, and based primarily on Tenax’s current contract run rate while excluding the financial impact of expenses associated with the January refinancing and the merger process itself, the combined company is projected to generate pro-forma revenues exceeding $210.0 million in 2026 along with Adjusted EBITDA surpassing $75.0 million, reflecting anticipated organic growth, operational efficiencies, and ongoing demand across defense and commercial aerospace markets; this forward-looking profile suggests a meaningful expansion in both scale and earnings capacity relative to historical standalone performance.
The enlarged enterprise is expected to employ approximately 430 professionals across operations, manufacturing, maintenance, and administrative functions, combining technical expertise in aircraft mission solutions with advanced engineering and production capabilities that support high-precision aerospace components used in critical flight systems; this workforce integration is intended to foster innovation, streamline processes, and deliver enhanced value to customers operating in demanding environments.
Leadership Vision and Governance Structure
Tom Foley, currently Chairman of Tenax, is expected to assume the role of Chairman of the combined company following completion of the merger, providing continuity of strategic direction and leveraging his experience in aerospace investment and operational growth; his leadership is anticipated to guide the integration process and shape long-term capital allocation strategies aimed at expanding the company’s presence within the aerospace and defense sector.
In commenting on the transaction, Foley emphasized that the merger represents a pivotal milestone for Tenax as it seeks to expand its footprint in aerospace and defense markets, noting that alignment with Air Industries Group delivers not only a public listing for Tenax shareholders but also enhanced manufacturing infrastructure and access to permanent capital capable of supporting sustained growth initiatives and acquisition opportunities; he expressed confidence that collaboration with Air’s management team would result in the development of a larger, more diversified aerospace enterprise.
Peter Rettaliata, Chairman of Air Industries Group, similarly characterized the merger as a compelling strategic opportunity, stating that the Board of Directors and management believe the transaction provides an attractive outcome for existing Air shareholders by enabling participation in a stronger combined entity offering a broader range of aerospace and defense products supported by expanded technical expertise and resources; he underscored the expectation that the merged organization will be positioned to create long-term value for customers while enhancing shareholder returns.
Transaction Structure and Ownership Realignment
Under the terms of the Merger Agreement, Air Industries Group will issue shares of its common stock to holders of Tenax membership units at closing, resulting in Tenax shareholders owning approximately 95% of the outstanding shares of the combined company while existing Air shareholders will retain approximately 5%, reflecting the relative valuation and contribution of each entity; this ownership structure significantly realigns the equity base while preserving continuity as a publicly traded company.
Concurrent with closing, governance changes will be implemented to reflect the new ownership profile, with two directors of Air to be selected jointly by the current Air board and Tenax, and six or more additional directors to be designated by Tenax, thereby establishing a board composition aligned with the merged company’s strategic direction and shareholder structure; this governance framework is designed to support oversight, transparency, and long-term strategic execution.
Share Issuance Mechanics and Debt Adjusted Pricing
The precise number of shares to be issued to Tenax members will be determined through a calculation of “AIR Net Indebtedness,” as defined in the Merger Agreement, which in turn establishes the “Debt Adjusted AIR Share Price,” ensuring that the equity consideration reflects the financial position of Air at closing; based on Air’s preliminary balance sheet as of December 31, 2025, the Debt Adjusted AIR Share Price is estimated at approximately $3.44 per share, which would result in the issuance of roughly 112.5 million shares of Air common stock to Tenax members.
The final merger consideration and resulting ownership percentages will be determined using AIR Net Indebtedness calculated as of the end of the month most recently completed more than fifteen days prior to closing, providing an updated and accurate financial snapshot to guide the final equity allocation and maintain fairness between the parties.
Shareholder Protections and Contingent Rights
The Merger Agreement includes provisions designed to address potential share price volatility surrounding the closing of the transaction; if the twenty-day volume weighted average price of Air’s common stock prior to closing falls below the Debt Adjusted AIR Share Price, Air will commence a tender offer to acquire up to one million shares from existing shareholders, thereby providing a measure of downside protection and liquidity.
Additionally, on the first anniversary of the merger, shareholders of Air as of the business day immediately preceding the closing will have a contingent right, subject to specified conditions, to require the company to redeem their remaining shares if the twenty-day volume weighted average price prior to that anniversary is less than 107.3% of the Debt Adjusted AIR Share Price; this redemption right, which is non-transferable, offers further assurance to pre-merger shareholders regarding post-transaction share performance and valuation alignment.
Financing and Debt Refinancing Arrangements
Importantly, the transaction is not conditioned upon Tenax obtaining financing, reflecting confidence in the capital structure supporting the merger; however, Air’s existing indebtedness is expected to be refinanced at closing, a step intended to optimize interest costs, align maturity profiles, and ensure that the combined company begins operations with an efficient and sustainable financial framework capable of supporting investment, integration, and future expansion initiatives.
Regulatory Approvals and Expected Timeline
Completion of the merger remains subject to approval by Air shareholders, customary regulatory filings, U.S. government approvals, and other closing conditions typical for transactions of this size and nature; Air’s directors and all named executive officers have committed to vote their shares in favor of the merger, signaling internal alignment and support for the strategic direction outlined in the agreement.
The companies currently anticipate that the transaction will close before June 30, 2026, assuming satisfaction of all required conditions, after which the combined entity will begin operating as an integrated aerospace and defense platform listed on the NYSE American under the AIRI symbol, combining Tenax’s special mission aviation capabilities with Air Industries Group’s precision manufacturing expertise to form a diversified enterprise positioned for growth in both government and commercial aerospace markets.
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