Comtech Telecommunications Corp. to Acquire CPI International, Inc. for $472.3 Million in a Strategic and Accretive Transaction
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Expands One-Stop Shopping Approach for RF Microwave Products and Provides Immediate Customer and Product Diversification
Key Strategic Benefits for Comtech:
* Almost triples the size of Comtech's RF microwave amplifier segment and is anticipated to generate over $50.0 million of earnings before interest, income taxes, depreciation and amortization (EBITDA) on an annual basis.
* Immediately establishes Comtech as a leading global supplier of vacuum electron devices (including klystron, traveling wave and power grid tubes). CPI's tubes and amplifiers are incorporated into products that are used in a broad array of applications and end-markets.
* Drives further innovation by combining manufacturing, engineering and sales teams for Comtech's XICOM branded-product group with CPI's Satcom product group to take advantage of united resources which are expected to deliver new and advanced amplifiers and other products to be used in satellite communications, radar applications and other electronic warfare systems.
* Diversifies Comtech's product portfolio and customer base. CPI has an extensive portfolio of over 4,500 microwave and power grid tubes. No customer other than the U.S. government accounted for more than 10% of CPI's sales for its last four fiscal quarters ended January 1, 2010.
* Approximately 40% of CPI's sales of $338.5 million for its last four fiscal quarters ended January 1, 2010 are derived from annuity-like sales for replacements, spares and repairs, including upgraded replacements for existing sole-sourced products. These sales have strong related cash flows which will allow Comtech to become a more stable, predictable business that is partially insulated from dramatic shifts in market conditions.
* Strategically redeploys a significant portion of Comtech's existing cash to enhance earnings per share and shareholder value. Comtech's balance sheet strength will remain strong. Comtech expects that, upon the closing of the transaction, it will have between $150.0 million and $200.0 million of cash and cash equivalents. |
