UPDATE 2-Comtech to buy Radyne for $11.50/shr
(Adds details from regulatory filing, share movement)
May 12 (Reuters) - Telecommunications equipment maker Comtech Telecommunications Corp (CMTL.O) agreed to buy Radyne Corp RADN.O for about $223.6 million to expand its satellite earth station product portfolio and diversify global customer base.
Comtech will make a first step cash tender offer at $11.50 per share, representing a premium of about 33 percent over Radyne's average closing price over the last 90 trading days and about 49 percent over the closing of $7.75 Friday on Nasdaq.
Shares of Radyne were up about 46 percent at $11.29 in trading before the bell.
Comtech also said it would close a manufacturing facility of Radyne, a maker of products used to send and receive data over satellite, and eliminate "redundant overhead functions."
The acquisition, which has an enterprise value of $195 million, is expected to be accretive within 12 months of closing, and significantly accretive, on an annual basis, thereafter, Comtech said in a statement. As of March 31, 2008, Radyne had cash and cash equivalents of $28.7 million.
Aggregate sales of the two companies would have been $651.5 million based on Comtech's sales of $504.3 million for its fiscal ended Jan 31, 2008, and Radyne's sales of $147.2 million for its fiscal ended March 31, 2008, Comtech said.
After the acquisition is closed, Fred Kornberg will continue to be the chief executive of Comtech, the company said in a filing to the U.S. regulators.
Comtech expects to save cost of about $3 to $4 million within the first 12 months after closing of the transaction, and about $9 to $11 million on an annual recurring basis thereafter.
Radyne, in a seperate statement said, its first-quarter earnings conference call, scheduled for Monday, May 12, 2008, has been cancelled.
Needham & Co LLC is acting as financial advisor to Radyne.
Comtech's stock closed at $41.29 Friday on Nasdaq. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Jarshad Kakkrakandy)