Stellant Systems, Inc. to Acquire Power Systems Technology Product Line from Comtech

Oct. 12, 2023-- Stellant Systems, Inc. (Stellant) and Comtech Telecommunications Corp. (NASDAQ: CMTL) (Comtech) today announced the companies entered into a definitive agreement under which Stellant will acquire Comtech’s Power Systems Technology (PST) product line for a total cash purchase price of $40 million, which includes a preliminary sales price of $35 million and contingent consideration up to $5 million based on the achievement of certain targets. The transaction was unanimously approved by the board of directors of both companies. Stellant is a portfolio company of Arlington Capital Partners (Arlington), a Washington-D.C. based private equity firm with extensive experience investing in regulated industries.

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The acquisition of the PST product line will strengthen Stellant’s portfolio of RF amplification products. PST’s rich heritage brings a differentiated set of technologies in the solid-state power amplification market, a talented work force and an almost entirely complimentary customer set to Stellant. Driving further innovation in solid state technology is a core principle of Stellant’s strategic vision to provide customers with best-in-class options across all amplification approaches, including vacuum tube and solid state.

Paul Russell, Chief Executive Officer of Stellant, said, “We are excited about the products and technology that PST brings to Stellant and look forward to investing in its technologies and employees to bring additional value to our customers. This partnership represents an important step in Stellant’s strategic vision and is another milestone in the Company’s 90-year history of technological innovations.”

Peter Manos, a Managing Partner at Arlington Capital Partners, added “PST’s market leading frequency and power capabilities with Gallium Nitride solid state power amplification combined with Stellant’s dominant frequency and power capabilities with travelling-wave tube power amplification creates, in our view, the technology leader in the market.”

“This decision is well aligned with our long-term vision for Comtech, and we are thrilled that our PST product line and associated team will have a tremendous opportunity to grow as part of Stellant,” said Ken Peterman, President, and CEO, Comtech. “We intend to use the net proceeds from this transaction to meaningfully reduce our outstanding debt, de-lever the balance sheet, reduce cash interest requirements, and provide flexibility to achieve our near-term strategic goals.”

The transaction is expected to close by the end of October 2023, subject to regulatory approvals and customary closing conditions.

Kirkland & Ellis LLP served as legal counsel to Stellant Systems and Arlington Capital Partners. Evercore served as financial advisor and Morgan Lewis as legal counsel to Comtech.

About Stellant Systems, Inc.

Stellant Systems is a premier manufacturer of critical spectrum and RF power amplification systems to the space, defense, medical, science and industrial markets for both domestic and international customers. Stellant has three domestic manufacturing facilities and nearly 1000 employees. For more information, visit www.Stellantsystems.com.

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. Our 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 our 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.

About Arlington Capital Partners

Arlington Capital Partners is a Washington, DC-based private equity firm that has managed approximately $7 billion in capital commitments. Arlington is focused on middle market investment opportunities in growth industries including government services and technology, aerospace & defense, healthcare, and business services and software. The firm’s professionals and network have a unique combination of operating and private equity experience that enable Arlington to be a value-added investor. Arlington invests in companies in partnership with high quality management teams that are motivated to establish and/or advance their company’s position as leading competitors in their field. For more information, visit Arlington Capital’s website at arlingtoncap.com and follow Arlington on LinkedIn.

Note About Forward-Looking Statements

Certain information in this press release contains forward-looking statements. Forward-looking statements can be identified by words such as: "will,” “intend,” “expect,” and similar references to future periods. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. All such forward-looking statements are based upon current plans, estimates, expectations and ambitions that are subject to risks, uncertainties and assumptions, many of which are beyond the control of Stellant and Comtech, that could cause actual results to differ materially from those expressed in such forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: the completion of the proposed transaction on anticipated terms and timing, or at all, including obtaining regulatory approvals on anticipated terms, anticipated tax treatment, unforeseen liabilities, the possibility that any of the anticipated benefits of the proposed transaction will not be realized or will not be realized within the expected time period, and other factors as described in Comtech’s filings with the Securities and Exchange Commission, including those under the heading “Risk Factors” in Cometch’s most recent Annual Report on Form 10-K. Stellant and Comtech do not intend to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.

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