Comtech Telecommunications Corp. Closes Strategic Acquisition of UHP Networks Inc.
March 03 2021 - 8:00AM
Business Wire
Acquisition Will Enhance Market
Leadership Position Across Mobile Backhaul, Maritime, Enterprise
and Defense/Government Markets
March 3, 2021 -- Comtech Telecommunications Corp. (“Comtech”)
(NASDAQ: CMTL), a global leader in the advanced secure wireless
communications market, announced today that it has closed the
acquisition of UHP Networks Inc. (“UHP”), a leading provider of
innovative and disruptive satellite ground station technology
solutions. Founded in 2011, UHP is based in Canada and has
developed revolutionary technology that is transforming the growing
Very Small Aperture Terminal (“VSAT”) market.
UHP’s unique time divisional multiple access (“TDMA”) technology
used in its VSAT platforms has software defined network
functionality that offers best-in-class support for very large
networks. With over 3 billion people globally who are not connected
to any wireless services, the UHP acquisition allows Comtech’s
customers to cost-effectively provide service to end-users with the
quality and reassurance of the Comtech brand and service
offerings.
Fred Kornberg, Chairman of the Board and Chief Executive Officer
of Comtech said, “The acquisition of UHP fits perfectly with our
strategy of offering the most robust and advanced wireless
communications solutions for our global customers. We are delighted
to acquire UHP and expect use of its incredible technology to
expand globally for many years to come.”
All UHP employees are expected to join Comtech, including Vagan
Shakhgildian, the President of UHP, who will also assume the role
of Senior Vice President of Network Products, leading Comtech’s
efforts to expand the presence of both HEIGHTSTM and UHP’s
solutions in the mobile backhaul, maritime, enterprise and
defense/government markets, which all have a growing need for
high-speed satellite-based networks.
The initial up-front payment of approximately $24.0 million was
paid in shares of Comtech common stock. An additional payment of
$5.0 million (payable in cash and/or common stock at Comtech’s
option) is due upon certain conditions being met, all of which are
expected to occur within the next twelve months. The purchase
agreement also provides for an earn-out payment of up to an
additional $9.0 million (payable in cash and/or common stock at
Comtech’s option) if certain agreed upon sales milestones are
reached over an eighteen-month period. Approximately 1.0 million
shares of Comtech’s common stock were issued at closing in respect
of the initial payment and escrow arrangements under the terms of
the purchase agreement.
Comtech is not purchasing UHP’s sister company headquartered in
Moscow; however, Comtech will be able to immediately market and
sell UHP products to customers in that region. Except for five
months of incremental amortization of intangible assets that is
expected to approximate $1.0 million, the acquisition will not
materially impact Comtech’s fiscal 2021 consolidated net sales or
Adjusted EBITDA guidance previously issued on December 9, 2020.
Comtech Telecommunications Corp. is a leader in the global
communications market headquartered in Melville, New York. With a
passion for customer success, Comtech designs, produces and markets
advanced secure wireless solutions to more than 1,000 customers in
more than 100 countries. For more information, please visit
www.comtechtel.com.
Certain information in this press release contains
forward-looking statements, including, but not limited to,
information relating to Comtech’s and UHP’s future performance and
financial condition, plans and objectives of Comtech’s management,
and Comtech’s management’s assumptions regarding such future
performance, financial conditions and plans. These forward-looking
statements are subject to significant risks and uncertainties.
Actual results could differ materially from such forward-looking
information, and the forward-looking statements in this release
could be affected by factors including, without limitation: the
possibility that the expected synergies and benefits from the
transaction will not be fully realized or will not be realized
within the anticipated time periods; the risk that Comtech’s and
UHP’s businesses will not be integrated successfully; the
possibility of disruption from the transaction or other recent
acquisitions making it more difficult to maintain business and
operational relationships or retain key personnel; the possibility
of disruption from recent acquisitions, making it more difficult to
maintain business and operational relationships or retain key
personnel; the risk that Comtech will be unsuccessful in
implementing a tactical shift in its Government Solutions segment
away from bidding on large commodity service contracts and toward
pursuing contracts for its niche products with higher margins; the
nature and timing of receipt of, and Comtech's performance on, new
or existing orders that can cause significant fluctuations in net
sales and operating results; the timing and funding of government
contracts; adjustments to gross profits on long-term contracts;
risks associated with international sales; rapid technological
change; evolving industry standards; new product announcements and
enhancements, including the risks associated with expanding the
sales of Comtech's HeightsTM Network Platform ("HEIGHTS"); changing
customer demands and or procurement strategies; changes in
prevailing economic and political conditions; changes in the price
of oil in global markets; changes in foreign currency exchange
rates; risks associated with Comtech's legal proceedings, customer
claims for indemnification, and other similar matters; risks
associated with Comtech’s obligations under its Credit Facility;
risks associated with Comtech's large contracts; risks associated
with the COVID-19 pandemic; and other factors described in this and
Comtech's other filings with the Securities and Exchange
Commission. Comtech undertakes no duty to update any
forward-looking statements contained herein.
PCMTL
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210303005228/en/
Media Contact: Michael D. Porcelain, President and Chief
Operating Officer Comtech Telecommunications Corp. 631-962-7000
info@comtechtel.com
Comtech Telecommunications (NASDAQ:CMTL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Comtech Telecommunications (NASDAQ:CMTL)
Historical Stock Chart
From Apr 2023 to Apr 2024