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Military Microwaves Supplement
Mercury Computer Systems Inc. (www.mc.com), a trusted provider of commercially developed application-ready ISR and EW subsystems for defense prime contractors, announced that it has signed a definitive agreement to acquire Micronetics Inc. (www.micronetics.com), a leading designer and manufacturer of microwave and radio frequency (RF) subsystems and components for defense and commercial customers.
Pursuant to the terms of the agreement, Mercury will acquire Micronetics via merger for $14.80 per share. This represents a fully diluted equity value of approximately $71.7 million and an enterprise value of approximately $75.4 million, including $3.7 million of net debt as of March 31, 2012. The acquisition will be funded with available cash and is expected to be immediately accretive to EBITDA. Subject to finalization of purchase accounting, the transaction is also anticipated to be accretive on a GAAP basis within 12 months of the closing date.
The acquisition is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if necessary, and the approval of Micronetics’ shareholders. The boards of directors of both Mercury and Micronetics have unanimously approved the transaction and the Micronetics board has recommended that Micronetics’ shareholders vote in favor of the transaction. The transaction is currently expected to close within Mercury’s fiscal 2013 first quarter ending September 30, 2012.
“We are pleased to have reached this agreement with Micronetics and are excited about the prospects this combination will provide for our customers, employees, and shareholders,” said Mark Aslett, President & CEO of Mercury. “The proposed acquisition is well-aligned with our stated acquisition strategy of growing our capabilities, services and offerings along the sensor processing chain. Micronetics’ unique microwave and RF capabilities will enhance our integrated digital and RF subsystem solutions for existing and next generation defense and intelligence programs. This type of integrated solution is unique in the marketplace and is in high demand by our defense prime customers.”
Based in Hudson, NH, Micronetics designs and manufactures high performance microwave and RF subsystems and components used in a variety of defense and commercial applications, including electronic warfare, radar, electronic countermeasures, satellite communications and commercial wireless products. For its fiscal year ended March 31, 2012, Micronetics reported revenues of $46.0 million, a 30 percent increase from the previous fiscal year, with net income of $3.4 million which was more than double earnings from the previous fiscal year. Approximately 78 percent of Micronetics' revenues are defense-related. Micronetics had 208 employees as of March 31, 2012, all based in the U.S., including manufacturing locations in Hudson, NH, West Caldwell and Ewing, NJ, and Manteca, CA.
For more information on the acquisition, visit www.mc.com. In addition, Mercury management will host a conference call at 8:30 a.m. EDT, Monday, June 11, 2012, to discuss the acquisition. Company representatives may answer questions concerning business developments and trends and other matters affecting the Company, the responses to which may contain information that has not been previously disclosed.
A replay of the call will be available by telephone from 11:30 a.m.
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