Comtech Looking at Sale or Merger Options

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PONTE VEDRA, Fla. — Satellite ground communications equipment manufacturer Comtech Telecommunications Corp. on Aug. 25 said it is “exploring strategic options … including the possible merger or sale of the company.”

Melville, New York-based Comtech, which has been refocusing its business away from the U.S. government since its 2010 loss of a big U.S. Army communications contract, has said in the past it would review strategic alternatives.

But the Aug. 25 statement was more specific, saying a sale or merger of the company is now on the table. Comtech has hired Citi and Proskauer Rose LLP as its investment and legal adviser, respectively, in the search for a transaction.

Comtech told investors in June that it had cleaned up its balance sheet, paid off all debt and accumulated cash and credit facilities totaling some $328 million that could be used for an acquisition.

The U.S. government, mainly the Department of Defense, until three years ago was Comtech’s predominant customer, accounting for three-quarters of its revenue. But starting with the loss of the Blue Force Tracking-2 Army contract, Comtech reduced the company’s size and focused more on non-U.S. government activities.

As of June, the U.S. government represented just 22 percent of Comtech’s backlog.