{"id":86255,"date":"2010-09-10T00:31:21","date_gmt":"2010-09-09T16:31:21","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/comtech-cpi-cancel-acquisition-deal\/"},"modified":"2010-09-10T00:31:21","modified_gmt":"2010-09-09T16:31:21","slug":"comtech-cpi-cancel-acquisition-deal","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/comtech-cpi-cancel-acquisition-deal\/","title":{"rendered":"Comtech, CPI Cancel Acquisition Deal"},"content":{"rendered":"

[09-09-10] Comtech Telecommunications<\/strong> cancelled its $472.3 million merger agreement with RF microwave manufacturer CPI International <\/strong>after unanimous board approval at both companies, Comtech announced Sept. 7.
\n    The agreement, initially announced in May, would have seen Comtech acquire CPI and repay all of its existing debt upon the closing of the transaction. At the time, Comtech CEO Fred Kornberg said the acquisition would have tripled the size of Comtech\u2019s RF microwave amplifier segment as part of his company\u2019s strategy to developing a one-stop shop for RF microwave products.
\n    As a result of the merger cancellation, CPI paid Comtech a $15 million breakup fee in accordance to the agreement the two companies signed in May. 
\n    While neither company would comment on the reasons behind the cancellation, Raymond James<\/strong> Analyst Chris Quilty told Satellite TODAY<\/em> that Comtech\u2019s loss of the U.S. Army<\/strong>\u2019s Blue Force Tracking 2 (BFT-2) deal in July may have been a factor and that CPI most likely initiated the deal\u2019s termination. \u201cIt appears that Comtech was fully committed to the CPI merger, and may have offered some concessions to offset the impaired offer price, but CPI\u2019s board apparently viewed Comtech as \u2018damaged goods\u2019 and elected to soldier on as an independent company. It is probably fair to assume that CPI lost interest in the deal following Comtech\u2019s loss of a critical contract (BFT-2) and the subsequent decline in Comtech\u2019s stock price by more than 30 percent.\u201d
\n    However, Quilty said the cancelled merger benefits Comtech more than it hurts the company, pointing to the fact that CPI\u2019s $15 million termination fee gives Comtech a reasonable cash boost, after the company spent less than $1 million on expenses related to the merger.
\n    \u201cFollowing the breakup, Comtech should emerge with a net cash position of more than $400 million and the ability to generate about $100 million of operating cash \u2013 even with the loss of the BFT-2 contract. This strong cash position should leave Comtech well-positioned to pursue alternative M&A opportunities \u2026 Investors were decidedly unimpressed with the CPI transaction at the time of its announcement, viewing the deal as both dilutive to earnings and growth. Consequently, the cancellation of the deal will likely be viewed as a positive event by many investors,\u201d said Quilty.<\/p>\n

Related Stories-<\/h2>\n

\nU.S. Army Selects ViaSat for Blue Force Tracking 2 Contract<\/b>   \t\t\tSatellite Today   \t\t\tJuly 22, 2010
\n[07-22-10] The U.S. Army selected ViaSat as the winner of the Blue Force Tracking 2 (BFT-2) program contract over Comtech Mobile Datacom, the competitors announced in separate statements issued July 21.<\/p>\n

Comtech Acquisition Looks Healthy in 2010 Second Quarter<\/b>   \t\t\tSatellite Today   \t\t\tMay 14, 2010
\n[05-14-10] CPI International, the microwave, radio frequency, power and control solutions provider set to be acquired by Comtech, reported 2010 second quarter revenues of $88 million, CPI announced May 13.<\/p>\n

Comtech Acquires RF Microwave Manufacturer for $472.3 Million<\/b>   \t\t\tSatellite Today   \t\t\tMay 11, 2010
\n[05-11-10] Comtech Telecommunications has signed an agreement with CPI International to acquire the microwave, radio frequency, power and control solutions provider for $372 million in cash and 4.4 million shares of Comtech stock in\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

[09-09-10] Comtech Telecommunications cancelled its $472.3 million merger agreement with RF microwave manufacturer CPI International after unanimous board approval at both companies, Comtech announced Sept. 7.     The agreement, initially announced in May, would have seen Comtech acquire CPI and repay all of its existing debt upon the closing of the transaction. At the time, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-86255","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/86255"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=86255"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/86255\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=86255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=86255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=86255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}