Comtech Telecommunications Completes EFData Acquisition
Melville, NY, July 10, 2000 - Comtech Telecommunications Corp. (Nasdaq: CMTL) today the completion of the acquisition of EFData, the satellite communications division of Adaptive Broadband Corporation. The operations of EFData are being combined with Comtech's subsidiary, Comtech Communications Corporation, which has been renamed Comtech EFData Corp. This significantly enlarged subsidiary, based in Tempe, AZ, designs, develops and manufactures a wide range of satellite communications products for the transmission of voice, data, facsimile and video.
Comtech acquired the business of EFData for $61.5 million in cash subject to post closing adjustments. The acquisition is being accounted for as a purchase and is expected to be accretive to earnings in fiscal year 2001. Comtech anticipates a fourth quarter write-off of EFData's in-process R & D in an amount not yet determined. Management is also in the process of assessing integration plans designed to improve operating efficiencies and minimize areas of duplication, all of which will likely result in an additional fourth quarter charge. Forty million dollars of the purchase price was supplied through institutional secured borrowings bearing interest at 9.25% due in installments through 2005, and the balance from internal Company funds.
The acquisition of EFData's business expands Comtech's growing telecommunications capabilities and enhances Comtech's product offerings, distribution reach and market presence. Additionally, it enables Comtech to enter the growing satellite networks solutions business.
Fred Kornberg, Chairman, President and Chief Executive Officer of Comtech Telecommunications, said, "EFData is a natural extension of our Comtech Communications' business. Joining complementary capabilities gives the enterprise a strong platform from which to bring innovative products to the telecom market, particularly in the modem, frequency converter and transceiver areas. We also expect EFData's important modem market position to benefit from our innovative Turbo Codec technology which decreases satellite data transmission costs by up to approximately 40%. "
Comtech Telecommunications Corp. is an innovative player in domestic and global high-technology markets. Through its operating units, Comtech pursues opportunities in three interrelated market segments: telecommunications transmission, RF microwave amplifiers, and mobile data communications services. In each of these segments, growth is driven by increasing demand for telecommunications infrastructure and network and messaging services. The company's specialties include the design and manufacture of advanced products and networks used for transmission of voice, data and video using satellite, over the horizon microwave, terrestrial line of sight and other wireless communications systems. More than 250 distinct Comtech products are in service in more than 100 countries.