Comtech Announces $45 Million Strategic Investment and Exchange of Convertible Preferred Stock
January 22 2024 - 9:20AM
Business Wire
Investment Enhances Comtech’s Financial
Flexibility and Supports Its Strategic Initiatives in Satellite
Ground Station Infrastructure and Next-Generation Terrestrial and
Wireless Solutions
January 22, 2024 -- Comtech Telecommunications Corp. (NASDAQ:
CMTL) (“Comtech” or the “Company”), a leading global technology
company providing terrestrial and wireless network solutions,
next-generation 911 emergency services, satellite and space
communications technologies, and cloud native capabilities, today
announced a $45.0 million investment by current shareholders White
Hat Capital Partners LP (“White Hat”), an investment firm focused
on sustainable value creation in technology companies serving
mission-critical applications, and funds affiliated with Magnetar,
a leading alternative investment manager with over $14 billion of
assets under management. In connection with the investment, the
Company exchanged all outstanding shares of Comtech’s existing
convertible preferred stock for a new series of convertible
preferred stock.
This strategic investment enhances Comtech’s financial
flexibility and strengthens the Company’s ability to capitalize on
its recent large contract awards and growing customer demand for
its satellite communications technologies and next-generation
terrestrial and wireless solutions. Comtech expects to apply the
proceeds of this investment across a range of initiatives which not
only support near-term working capital needs and general corporate
purposes, including the repayment of certain outstanding
indebtedness, but also its growth prospects. The issuance of the
new series of convertible preferred stock demonstrates the
continued commitment of White Hat and Magnetar, and is an important
step towards the completion of the Company’s previously announced
process to refinance its existing Credit Facility and further
increase its financial and operational strength.
Mark Quinlan, who currently serves as an appointee of White Hat
and Magnetar on the Company’s Board of Directors, will retain his
position on the Board. Mr. Quinlan is White Hat’s Co-Founder and
Managing Partner and has more than 20 years of experience in the
technology sector. He has provided valuable insight and experience
to the Board of Directors since January 2022.
“We are grateful for this investment and endorsement of our
strategy and team by two of our existing long-term shareholders,”
said Comtech’s Chairman and CEO, Ken Peterman. “Magnetar and White
Hat understand our Company, our end markets, and the potential of
our One Comtech vision. With White Hat’s investment experience
within the technology sector and Magnetar’s breadth of investment
experience in both private and public markets and across asset
classes and capital structures, we value their continued support
and are excited to strengthen our relationship with them at this
key inflection point for the Company.”
“Under CEO Ken Peterman’s leadership, the entire Comtech team
has made incredible progress on its One Comtech transformation,”
said Mr. Quinlan. “We recognize Comtech’s potential and believe
this investment further supports the Company’s commitment to
developing and delivering mission-critical solutions for its
customers.”
Summary of Investment
Terms
White Hat and Magnetar purchased $45.0 million of a new series
of convertible preferred stock and exchanged all outstanding shares
of Comtech’s existing convertible preferred stock for shares of the
new series of convertible preferred stock. The preferred stock will
be convertible into shares of Comtech common stock at a conversion
price of $7.99 per share; carries a 9.00% dividend, payable in
kind, or a 7.75% dividend, payable in cash, at Comtech’s election;
and contains an optional redemption date of October 31, 2028.
Further details will be included in the Company’s Current Report on
Form 8-K to be filed with the Securities and Exchange Commission.
That report will describe the investment in additional detail,
including exhibits with copies of associated transaction
documentation.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as
legal advisor to Comtech and Sidley Austin LLP is serving as legal
advisor to the Special Committee of the Board of Directors of
Comtech. Willkie Farr & Gallagher LLP is serving as legal
advisor to Magnetar and Schulte Roth + Zabel LLP is serving as
legal advisor to White Hat.
About Comtech
Comtech Telecommunications Corp. is a leading global technology
company providing terrestrial and wireless network solutions,
next-generation 9-1-1 emergency services, satellite and space
communications technologies, and cloud native capabilities to
commercial and government customers around the world. Comtech’s
unique culture of innovation and employee empowerment unleashes a
relentless passion for customer success. With multiple facilities
located in technology corridors throughout the United States and
around the world, Comtech leverages its global presence, technology
leadership, and decades of experience to create the world’s most
innovative communications solutions. For more information, please
visit www.comtech.com.
Forward-Looking
Statements
This press release contains statements that are forward-looking
in nature and involve certain significant risks and uncertainties,
including with respect to the offering of securities, the intended
use of proceeds and our current expectations, initiatives,
strategies or future plans. No assurance can be given that the
transaction will be completed, or that the proceeds from the
offering will be used as indicated. Forward-looking statements are
subject to numerous conditions, risks, and uncertainties, many of
which are beyond the control of the Company, including those
identified in the Company’s filings with the Securities and
Exchange Commission. Forward-looking statements are also based on
assumptions that may not be realized and involve risks and
uncertainties that could cause actual results or other events to
differ materially from the expectations and beliefs contained
herein. Any forward-looking information in this press release is
qualified in its entirety by the risks and uncertainties described
in Securities and Exchange Commission filings. The Company
undertakes no obligation to release publicly any updates or
revisions to any forward-looking statements contained herein except
as required by law.
PCMTL
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240122671989/en/
Investor Relations Maria Ceriello
Investors@comtech.com
Comtech Telecommunications (NASDAQ:CMTL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Comtech Telecommunications (NASDAQ:CMTL)
Historical Stock Chart
From Apr 2023 to Apr 2024