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Military Microwaves Supplement
CPI International Inc. (CPI) announced the signing of a definitive merger agreement with Comtech Telecommunications Corp. (CMTL) under which Comtech will purchase CPI in a cash and stock transaction with an enterprise value of approximately $472.3 M. Comtech will fund the acquisition by redeploying approximately $372.0 M of its existing cash plus the issuance of approximately 4.4 million shares of Comtech common stock. All existing CPI debt is anticipated to be repaid upon the closing of the transaction.
Joe Caldarelli, Chief Executive Officer of CPI, said, "The Board of Directors and management believe this strategic combination with Comtech is compelling and provides significant benefits for shareholders, customers and our employees. CPI shareholders will benefit from an immediate premium while sharing in the future growth of the combined companies. Furthermore, our customers will benefit from greater resources and more diverse product offerings, and our employees will benefit from being part of a larger more diversified company."
Fred Kornberg, President and Chief Executive Officer of Comtech, said, "We are excited to have reached this agreement with CPI and believe this combination is beneficial to the stakeholders of both companies. CPI is a unique business and a leading global supplier of vacuum electron devices, which are used in hundreds of critical commercial and military applications. The acquisition is a significant step in our strategy of developing a one-stop shopping approach for RF microwave products. The combination will allow us to unite our companies' resources to develop and bring new and innovative products to market and to our customers. We welcome CPI's talented workforce to the Comtech team and are excited about the future."
Kornberg and Caldarelli jointly stated, "We intend to thoughtfully and actively address our customers' needs as we integrate our complementary and diverse product lines. We plan no interruptions in any scheduled or committed rollouts from either company, and we intend to continue to support all existing Comtech and CPI products and services. We anticipate honoring all existing agreements with customers, VARs, distributors, OEMs and other strategic partners."
CPI's senior executive management and corporate team are expected to stay in their current or similar roles and will work directly with Comtech management after the transaction closes.
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