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Allen-Vanguard Corporation (the "Company" or "Allen-Vanguard") (TSX: VRS) of Ottawa, Canada announced today that it has completed the previously announced acquisition of Med-Eng Systems Inc, ("Med-Eng").

Under the terms of the all-cash agreement, Allen-Vanguard paid approximately $600 million at closing to purchase all the shares of Med-Eng on a debt and cash free basis, plus approximately $40 million for excess working capital. All amounts are in Canadian dollars unless otherwise noted.

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    The transaction was funded through a combination of
    - $94 million in a subscription receipt private placement for
      approximately 14.6 million common shares of the Company at a price of
      $6.85 per share ("Private Placement");
    - Approximately $350 million (US $341 million translated at a rate of
      $1.03 on closing) in five-year term debt financing ("Senior Debt
      Facility") at LIBOR plus 7%.
    - Approximately $190 million of notes issued to the shareholders of
      Med-Eng ("Vendor Notes"). The Vendor Notes mature on December 31, 2007,
      subject to potential extension, and bear interest at 10% per annum. A
      consortium of lenders has agreed to purchase approximately $150 million
      of the Vendor Notes from the vendors on October 1, 2007 ("Vendor Note
      Purchase") to the extent that the Vendor Notes remain outstanding on
      that date;
    >>

The Company also arranged a $20 million revolving credit facility ("Revolver Facility"), of which $10 million was drawn on closing. Prior to closing, the Company repaid approximately $8.8 million to Bank of Scotland to retire existing indebtedness, including a term loan, working capital facility and letters of credit.

Transaction costs, including agent commissions on the Private Placement, commitment fees on the Senior Debt Facility, Revolver Facility, Vendor Note Purchase and legal and financial advisory fees total approximately $34.1 million of cash, funded through the Revolver Facility and the Company's existing cash reserves, plus warrants valued at approximately $17.5 million.

As previously announced, Allen-Vanguard filed a preliminary prospectus (the "Prospectus") on August 31, 2007, pursuant to which it intends to issue approximately $200 million in common shares, to be priced in the context of the market, with a potential 15% over allotment option. The Company intends to use these funds to retire the Vendor Notes and repay a portion of the Senior Debt Facility (the Prospectus is available on SEDAR at (www.sedar.com)).

The Med-Eng acquisition adds significant new U.S. based revenue, and further diversifies the Company's customer and product base with complementary offerings core to explosive ordnance disposal (EOD) and counter measures against improvised explosive devices (IEDs). The Company noted that order backlog at Med-Eng as well as at Allen-Vanguard has continued to rise and on a consolidated pro forma basis at July 31, 2007 backlog stood at approximately $225 million.

Organizationally, the Company will continue to operate three business segments, Electronics, Personal Protection Products, and Services on a consolidated basis. The key senior managers at Med-Eng will assume roles in the Ottawa corporate headquarters substantially similar to their former functions. Other key members of the corporate team include Mr. Bob Adams, recently named to head the Company's international operations based in the U.K., and Mr. Roger Davies, Managing Director of Hazard Management Solutions Ltd., the Company's counter-IED Services business acquired in June 2007.

"This is an exciting next chapter for our shareholders, customers and staff," concluded David Luxton, President and CEO of the Company. "We warmly welcome the management and staff of Med-Eng to the Allen-Vanguard family as a place to build rewarding careers doing work that makes a life-and-death difference every day, as well as creating economic value and superior returns for our shareholders."

About Med-Eng

Med-Eng (www.med-eng.com), headquartered in Ottawa, Canada, is a leading global supplier of Explosive Ordnance Disposal (EOD) equipment, and is the world market leader for bomb disposal suits and helmets. Med-Eng is also an important supplier of Electronic Counter Measures (ECM) equipment to the U.S. military through General Dynamics Armament and Technical Products. In its fiscal year ended December 31, 2006, Med-Eng recorded revenue of $261 million, and earnings before interest, taxes, depreciation and amortization ("EBITDA") of $98 million. Almost 90% of the revenue was from sales in North America, primarily in the U.S.

About Allen-Vanguard

Allen-Vanguard Corporation and its subsidiaries worldwide operate under the brand "Allen-Vanguard". The Company develops and markets technologies, tools and training for defeating and minimizing the effects of hazardous devices and materials, whether Chemical, Biological, Radiological, Nuclear or Explosive (CBRNE). The Company's equipment is in service with leading security and military forces in more than 120 countries. Products include Electronic Counter-Measures ("ECM") equipment for jamming remote detonation of terrorist devices, specialty security equipment for Explosive Ordnance Disposal ("EOD"), remote intervention robots for hazardous applications, vehicle barrier systems, and personal protective wear for use in dealing with bio-chemical agents. Allen-Vanguard is the sole, worldwide licensee and/or developer of patented technologies such as the Universal Containment System and CASCAD Foam for blast mitigation and decontamination of bio-chemical warfare agents. Head office operations are located in Ottawa, Ontario, Canada, with manufacturing operations in Stoney Creek, Ontario; Tewkesbury, U.K.; and Cork, Ireland, and sales offices in Canada, the U.S., the U.K. and Asia. The Company's shares are listed on The Toronto Stock Exchange (TSX: VRS).

This press release contains forward-looking statements, which reflect Allen-Vanguard's current expectations regarding future events, its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "plans," "believes," "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future acquisitions or dispositions, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company and economic factors. Forward-looking statements are not promises or guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made about the Company. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decision and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware that the Company disclaims any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Discussion and Analysis to be released by the Company.

To find out more about Allen-Vanguard Corporation (TSX:VRS), visit our website at www.allen-vanguard.com.

SOURCE: ALLEN-VANGUARD CORPORATION

David Luxton, President and CEO, (613) 769-5353; Rob Ryan, Chief Financial Officer, (416) 277-0288