Comtech to Acquire TeleCommunication Systems

Comtech Telecommunications Corp. announced that it has entered into an agreement to acquire TeleCommunications Systems Inc. (TCS) for $5.00 per share which represents an enterprise value of approximately $430.8M.  TCS is a provider of secure and reliable wireless solutions that enable 911, commercial location-based services and deployable wireless infrastructure, cybersecurity, and applications for mobile location-based services and messaging.  TCS has LTM revenues of $364.1M and adjusted EBITDA of $40.4M.  

According to the press release, strategic benefits to Comtech of the acquisition include:

• Creates scale and more diversified earnings, reducing volatility associated with challenging international (including emerging markets) business conditions;
• Provides entry into commercial markets, including the public safety market which has a growing need for next generation emergency 911 systems;
• Enhances position with existing customers including establishing Comtech as a prime contractor on several U.S. government contracts, including becoming the prime contractor for sale of its over-the-horizon microwave systems (troposcatter) products; and
• Generates meaningful cost synergies.

The transaction is expected to close no later than March 2016.  Citigroup Global Markets Inc. is the financial advisor to Comtech.  Proskauer Rose LLP is Comtech's legal counsel.  Lazard is the financial advisor to TCS and Brian Cave LLP is TCS's legal counsel.