M&A

Comtech dishes out $430.8M to acquire TeleCommunication Systems Inc.

Comtech Telecommunications Corp. has acquired TeleCommunication Systems Inc. in a $430.8 million deal that brings TCS’ C4ISR and next-gen 911 services capabilities to Comtech.

The acquisition helps Comtech enter commercial markets including the public safety market as well as enhances its position with existing customers.

TCS also brings Comtech a number of U.S. government contracts including a prime spot for a contract that calls for the sale of TCS’ over-the-horizon microwave systems products, Comtech said in a release.

Comtech will buy TCS in a cash transaction for $5.00 per TCS share, adding up to an approximate $430.8 million enterprise value. TCS’ $143.6 million of debt will be repaid once the transaction closes, the company said.

TCS reported an annual fiscal 2015 revenue of $364.1 million and adjusted EBITA of $40.4 million, with Comtech reporting an annual revenue of $307.3 million and an adjusted EBITA of $51.8 million.

The combined companies employ about 2,000 employees.

“The acquisition is a significant step in our strategy of entering complementary markets and expanding our domestic and international commercial offerings,” said Dr. Stanton Sloane, Comtech president and CEO.

The acquisition is expected to close no later than March 2016.

About the Author

Mark Hoover is a senior staff writer with Washington Technology. You can contact him at mhoover@washingtontechnology.com, or connect with him on Twitter at @mhooverWT.

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