Under the terms of the agreement, EDO received $1 million of the sale proceeds upon signing. An additional $21 million is due at closing, which is expected to occur on Sept. 26. The New York City-based EDO will have up to two years to vacate the facility, and the remaining $7 million will be received at that time. The transaction resulted in a pre-tax loss of $9.2 million, which was recorded in the second quarter ended June 28.

"This sale will free up assets for more productive use, including acquisitions," James M. Smith, EDO's CEO, said in a statement. "Our decision was based on the results of a recently completed company-wide facility plan that evaluated a number of potential uses for this property. That plan considered future increases in production volumes that are expected due to our participation in major programs, such as the F/A-22 and the Joint Strike Fighter. We concluded that the Deer Park facility will not meet future requirements, and thus an outright sale is our best option."

Current production at the Deer Park plant includes aircraft defensive-system upgrades and the manufacture of high-performance antenna products. "In addition to the sale proceeds, we also anticipate increased efficiencies and lower ongoing expenses after these operations have been relocated," Smith added. Management is currently focusing on a small number of selected options for the relocation of the affected operations.