Comtech Telecommunications (News - Alert) has agreed to acquire Radyne Corporation in an all-cash transaction.

 

The companies signed a definitive agreement, and as per the deal—approved by the both the companies’ Board of Directors—Comtech will make a first step cash tender offer at $11.50 per share, which represents a premium of approximately 33 percent over Radyne’s (News - Alert) average closing price over the last ninety trading days.

 

Once the first step cash tender offer is completed, it will be followed by a merger at the same price. The acquisition has a transaction equity value of approximately $223.6 million and an enterprise value of $195.0 million. Radyne has cash equivalents of $28.7 million as of March 31, 2008.

 

With the help is this latest acquisition, Comtech expects to expand its satellite earth station product portfolio and introduce Radyne’s shared bandwidth satellite networking solution, known as SkyWire.

 

All aspects of Radyne's satellite earth station business are expected to be fully integrated into Comtech EF Data Corp.

 

Fred Kornberg (News - Alert), president and CEO at Comtech believes that acquiring Radyne offers a unique opportunity to unite the companies' resources to develop and bring to market innovative, new products that can increase customers' return on investment and reduce operating costs.

 

“This strategic combination makes sense for both companies and I firmly believe it is the right step at the right time for all of Radyne's stakeholders,” said Myron Wagner, CEO at Radyne.

 

He also said that his company’s shareholders will benefit from a significant premium to Radyne's stock price, and customers will benefit from greater resources and product offerings, and also employees will benefit from being part of a larger, more diversified company.

 

The acquisition of Radyne by Comtech is expected to result in substantial operating efficiencies of approximately $3.0 to $4.0 million within twelve months of closing, and approximately $9.0 to $11.0 million on an annual recurring basis thereafter.

 

Both companies expect to achieve synergies by closing Radyne's manufacturing facility and eliminating redundant overhead functions. Additional synergies are expected from the consolidation of Radyne's corporate functions into Comtech's headquarters in Melville, New York.