Comtech Telecommunications makes deal with dissident shareholders, avoids proxy fight

Comtech Telecommunications Corp., with an office in Melville, would reshuffle its board of directors and avoid a proxy fight under an agreement reached with dissident investors, the parties announced on Monday.

The manufacturer of components for satellite and 911 communications systems has agreed to appoint two new members of its eight-member board. Two current members will not seek reelection, according to the announcement.

The boardroom reorganization is in response to a challenge from investors led by two former Comtech CEOs who put forward a slate of eight directors in September for shareholders to consider at the annual meeting later this year. The former CEOs, Fred Kornberg and Michael Porcelain, have criticized the company’s management, citing four straight years of losses.

News of the board changes sent Comtech’s stock up more than 7% on the Nasdaq Stock Market on Monday compared with Friday’s close before it fell back. The stock closed up 5 cents, or about 2%, to $2.65 per share on Monday.

In a joint statement, the investor group and Comtech management said the board would be “significantly refreshed” by the new directors, along with a director added on Oct. 31, Kenneth Traub.

Traub is a managing partner at the investment consulting firm Delta Value Advisors and a former CEO and board chairman of several public companies in distress. His appointment last month was announced at the same time that John Ratigan became Comtech CEO and a board member after serving as interim CEO since March.

At the time, Porcelain, the former CEO, said the board lacked the "relevant industry expertise and operational experience" needed in "stabilizing and growing Comtech."

Under the terms of Monday's agreement, he  "will be entitled to engage in discussions with the company periodically and to provide advice or recommendations" on a quarterly basis. "The company will have no obligation to accept Mr. Porcelain’s recommendations," states a securities filing from Comtech.

Porcelain, through a spokesperson, declined to comment. Comtech spokesperson Jamie Clegg didn't respond to a request for comment.

One of the new board members, Michael Hildebrandt, was appointed on Monday, the filing shows. He was among the eight board nominees put forward by the dissident investors.

Hildebrandt is a senior investment professional at Freshford Capital Management, which once held a large stake in Comtech.

Among the current board members are Lawrence J. Waldman, an accountant and chairman of the Long Island Association business group, and Yacov A. Shamash, an engineering professor at Stony Brook University and founder of its Center for Excellence in Wireless and Information Technology.

Comtech moved its headquarters from Melville to Arizona earlier this year, holding a ceremony with Arizona Gov. Katie Hobbs in August.

The change of address did not impact the 40 jobs at the former headquarters at 68 S. Service Rd., the Comtech spokesperson told Newsday last month.

Nearly 60 public companies now call Long Island home, down from more than 80 a decade ago.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.