Good Afternoon
Good Afternoon

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. Credit: Newsday / Alejandra Villa

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.

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.

More news