The Allied Defense Group Announces Agreement to Sell the VSK Group in a $47.6 Million Transaction

Sept. 10, 2007

VIENNA , Va., Sept. 10 /PRNewswire-FirstCall/ -- The Allied Defense Group, Inc. (Amex: ADG) announces it has entered into a definitive agreement to sell its Belgium subsidiary, The VSK Group, to Xtralis Pty Ltd. Xtralis Pty Ltd is a global leader in security surveillance systems.

ADG will receive euro 35 million (approximately $47.6 million), with the sale expected to close on September 14, 2007 .

Major General (Ret) John J. Marcello, President and Chief Executive Officer of The Allied Defense Group said, "VSK has grown substantially since ADG acquired the business in 1994. Today's acquisition allows XTRALIS access to important technologies and an improved entree to European markets. We believe the value of our VSK Group as reflected by this transaction represents an assessment that has not been reflected in ADG's public valuation, and therefore we believe the sale is a significant step forward in our goal of maximizing shareholder value. The proceeds from VSK's sale will help us increase our liquidity, reduce debt and improve our core competencies. ADG continues to right-size, restructure and recapitalize to maximize value for all of our shareholders."

The Allied Defense Group, Inc. was advised by Houlihan Lokey Howard & Zukin in connection with the transaction.

About The Allied Defense Group, Inc.

The Allied Defense Group, Inc. is a diversified international defense and security firm which: develops and produces conventional ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated electronic and microwave security systems principally for European and North American markets; manufactures battlefield effects simulators and other training devices for the military; and designs and produces state-of-the-art weather and navigation software, data, and systems for commercial and military customers.

For more information, please visit the Company web site:

Certain statements contained herein are "forward looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.

For More Information, Contact: Crystal B. Leiderman Director, Investor Relations 800-847-5322

SOURCE The Allied Defense Group, Inc.

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