LI's Comtech exploring possible sale; shares rise

Fred Kornberg, president and chief executive at defense Fred Kornberg, president and chief executive at defense electronics contractor Comtech Telecommunications Corp. on May 15, 2003, in Melville. Photo Credit: Newsday / Alejandra Villa

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Communications equipment developer Comtech Telecommunications Corp. said it is exploring a possible merger or sale of the company, sending its shares higher this week.

Shares of the Melville-based company, which makes satellite-based communications equipment for the government and commercial customers, climbed 91 cents, or 2.47 percent, yesterday to close at $37.72.

The uptick in prices started Monday, when shares closed 4.8 percent higher at $36.81. The stock jumped in afternoon trading after the company said it was "exploring strategic alternatives to enhance shareholder value, including a possible merger or sale."

Comtech's stock market capitalization is roughly $600 million.

Comtech has retained investment bank Citigroup as its financial adviser and Proskauer Rose LLP as its legal adviser.

The company warned that there was no assurance that a transaction or other change would result.

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Comtech shares over the last 52 weeks ranged from $23.84 to $40.48. Over the last year the share price has increased $12.19 or 47.69 percent.

In June, Comtech posted a 27 percent year-over-year increase in fiscal third-quarter sales to $88.9 million, on strength in its telecommunications transmission and microwave amplifiers businesses. Despite a decline in sales of mobile data communications equipment, net income for the third quarter more than doubled to $5.9 million from $2.9 million in the year-earlier period.

Comtech employs about 1,200 people at facilities in Massachusetts, California, Arizona and elsewhere.

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