Exclusive: Mercury Systems pulls sale - sources

Tue May 27, 2014 11:52am EDT

(Reuters) - Mercury Systems Inc, a supplier of digital signal and image processing systems to the aerospace and defense industry, has ended its exploration of a near-term sale, said three people familiar with the matter.

Mercury, which has a market value of roughly $402 million, offers big data processing systems, software and services to companies including Boeing, Lockheed Martin Corp, Northrop Grumman Corp and Raytheon Co.

The Chelmsford, MA-based company ran an auction to sell itself, but a deal could not be reached because pricing expectations were not met, the people said. The people asked not to be named because the matter is not public.

On an April 29 earnings call Chief Executive Officer Mark Aslett said Mercury could be shifting into acquisition mode. One of the people said this was tantamount to the company's calling off the sale effort. Aslett said on the call that potential targets could be radio frequency or microwave transmission companies. Mercury's earnings before interest, taxes, depreciation and amortization were up 47 percent year over year, Aslett said on the call.

Mercury Systems was working with a financial adviser on the sale and was seeking around $500 million, Reuters previously reported.

The company was not immediately available for comment.

(Reporting by Mike Stone; editing by Prudence Crowther)