MELVILLE, N.Y.-Comtech Telecommunications Corp. said it entered an agreement to acquire EFData, the satellite communications division of Adaptive Broadband Corp., for $61.5 million in cash.
Shortly following the acquisition announcement last Tuesday, shares of Adaptive Broadband rose approximately 21 percent, from $18.43 per share to $22.37 per share. The stock closed at $23.
Comtech’s shares also increased $2.56 to close at $12.81.
EFData designs, develops and manufactures a variety of satellite communications products for voice, data, fax and video transmission. The company will be combined with Comtech Communications Corp., the subsidiary of Comtech Telecommunications that produces equipment used in satellite communications.
Adaptive Broadband said it is in the process of divesting two other divisions and going forward will focus its business on the wireless broadband access market. The company’s AB-Access wireless broadband product replaces the local loop for residential and business subscribers and offers data transmission rates up to 25 Megabits per second.
“Opportunities for AB-Access have grown since January 2000, when we announced our intent to divest our legacy businesses, which validates our need to focus solely on what we believe is a market that will exceed $100 billion in aggregate over the next 10 years,” said Donna S. Birks, executive vice president and chief financial officer of Adaptive Broadband.
The transaction is expected to close by June 30.
“With revenues approaching $100 million, EFData will greatly expand our capabilities in the telecommunications market, specifically in the modem and transceiver areas,” said Fred Kornberg, chairman, president and chief executive officer of Comtech Telecommunications.
Both EFData and Comtech Communications are based in Tempe, Ariz.
