Comtech Telecommunications to acquire Israeli firm for $532.5 million

Comtech Telecommunications Corp., Long Island's 13th largest public company, has agreed to acquire an Israeli satellite communications provider for $532.5 million in cash and stock, the companies announced Wednesday.

Comtech headquarters will remain in Melville, while the headquarters of new Comtech subsidiary Gilat Satellite Networks Ltd. will stay in Petah Tikva, the companies said.

Shares of Comtech fell Wednesday, closing down 19% to $30.03, while Gilat shares declined 6% to $9.50.

Comtech had 2,013 employees, including temporary employees and contractors, as of July 31, and said none of its facilities are expected to be closed as a result of the transaction.

About 150 of those workers are in Melville, said Michael Porcelain, who is adding the role of Comtech president to his titles as senior vice president and chief operating officer.

Gilat had 1,012 full-time employees as of Dec. 31, 2018.

"The acquisition better positions Comtech to take advantage of key marketplace trends, particularly the growing demand for satellite connectivity and the enormous long-term opportunity set that is emerging in the secure wireless communications market," Comtech chairman and chief executive Fred Kornberg said in a statement.

Dov Baharav, chairman of Gilat's board of directors called the deal "compelling" and said the combined company will be "well positioned to create future value against a highly favorable industry backdrop."

The acquisition calls for Gilat shareholders to receive $3.18 in cash and 0.84 of a share of Comtech stock for each share of Gilat held.

After the deal is closed, Gilat shareholders will own about 16% of the combined company.

Gilat makes satellite modems and ground stations and provides infrastructure for the in-flight entertainment system offered by Chicago-based Gogo Inc.

Comtech makes 911 systems, satellite ground station equipment and troposcatter communications systems, which send microwave signals long distances by bouncing them off the atmosphere.

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.