Comtech Telecommunications Corp. (Nasdaq: CMTL) announced today that it has agreed to acquire Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) in a cash and stock transaction for $10.25 per Gilat ordinary share. 70% will be paid in cash and 30% in Comtech common stock, for an enterprise value of $532.5 million. This reflects a company value of $577.3 million.
Founded in 1987, Israeli company Gilat has developed satellite networking technology, solutions and services with market leading positions in the satellite ground station and in-flight connectivity solutions markets and deep expertise in operating large network infrastructures.
The combined companies would employ approximately 3,000 people and offer best-in-class satellite technology, public safety and location technology and secure wireless solutions to commercial and government customers around the world.
Comtech chairman and CEO Fred Kornberg said, "The acquisition better positions Comtech to take advantage of key marketplace trends, particularly the growing demand for satellite connectivity and the enormous long-term opportunity set that is emerging in the secure wireless communications market. I believe that the combination of accelerating satellite connectivity demand and the increasing availability of low-cost satellite bandwidth, makes this a perfect time to unify Comtech and Gilat’s solutions and offer our combined customers best-in-class platform-agnostic satellite ground station technologies. Gilat is an exceptional business that has developed extraordinary technology and has a well-respected product portfolio supported by strong research and development capabilities. I welcome Gilat’s entire talented workforce to the Comtech family."
Gilat chairman Dov Baharav said, "The Gilat Board of Directors and management believe this highly strategic combination is compelling. It is an excellent outcome for our shareholders who receive both cash and an equity interest in a strong company with a broader range of products and the benefits of combined expertise and resources that is well positioned to create future value against a highly favorable industry backdrop. I have long admired Comtech’s commitment to technology leadership and I firmly believe that employees will have expanded opportunities for career development. No doubt, the future will be very bright for Comtech and Gilat and all of our stakeholders."
The acquisition is a major success for the FIMI Israel opportunity Funds, which has built a 34% stake in Gilat between 2012 and 2014, paying $80 million at an average gross share price of $4.30 per share. FIMI has led major strategic and operational changes that have transformed the company and will now receive from Comtech $10.25 per share - a return of nearly 240%.
Comtech was advised in the deal by Proskauer Rose LLP. The Proskauer team was led by partners Robert Cantone and Michael Ellis (M&A) and included Jenn Wong and Brittany Perskin (M&A), Ron Franklin and Philip Kaminski (Finance), Ira Bogner and Oleg Zakatov (Employee Benefits), Richard Corn (Tax), Colin Kass and John Ingrassia (Antitrust), Daryn Grossman (Intellectual Property) and Gail Port (Environmental).
Published by Globes, Israel business news - en.globes.co.il - on January 29, 2020
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