Comtech Telecommunications Corp. Closes
Strategic Acquisition of UHP Networks Inc.
March 3, 2021
Comtech Telecommunications
Corp. has closed the acquisition of UHP Networks
Inc. (“UHP”), a leading provider of innovative
and disruptive satellite ground station
technology solutions. Founded in 2011, UHP is
based in Canada and has developed revolutionary
technology that is transforming the growing Very
Small Aperture Terminal (“VSAT”) market.
UHP’s unique time
divisional multiple access (“TDMA”) technology
used in its VSAT platforms has software defined
network functionality that offers best-in-class
support for very large networks. With over 3
billion people globally who are not connected to
any wireless services, the UHP acquisition
allows Comtech’s customers to cost-effectively
provide service to end-users with the quality
and reassurance of the Comtech brand and service
offerings.
Fred Kornberg, Chairman of
the Board and Chief Executive Officer of Comtech
said, “The acquisition of UHP fits perfectly
with our strategy of offering the most robust
and advanced wireless communications solutions
for our global customers. We are delighted to
acquire UHP and expect use of its incredible
technology to expand globally for many years to
come.”
All UHP employees are
expected to join Comtech, including Vagan
Shakhgildian, the President of UHP, who will
also assume the role of Senior Vice President of
Network Products, leading Comtech’s efforts to
expand the presence of both HEIGHTSTM and UHP’s
solutions in the mobile backhaul, maritime,
enterprise and defense/government markets, which
all have a growing need for high-speed
satellite-based networks.
The initial up-front
payment of approximately $24.0 million was paid
in shares of Comtech common stock. An additional
payment of $5.0 million (payable in cash and/or
common stock at Comtech’s option) is due upon
certain conditions being met, all of which are
expected to occur within the next twelve months.
The purchase agreement also provides for an
earn-out payment of up to an additional $9.0
million (payable in cash and/or common stock at
Comtech’s option) if certain agreed upon sales
milestones are reached over an eighteen-month
period. Approximately 1.0 million shares of
Comtech’s common stock were issued at closing in
respect of the initial payment and escrow
arrangements under the terms of the purchase
agreement.
Comtech is not purchasing
UHP’s sister company headquartered in Moscow;
however, Comtech will be able to immediately
market and sell UHP products to customers in
that region. Except for five months of
incremental amortization of intangible assets
that is expected to approximate $1.0 million,
the acquisition will not materially impact
Comtech’s fiscal 2021 consolidated net sales or
Adjusted EBITDA guidance previously issued on
December 9, 2020.