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Comtech plans $800 million credit facility with Gilat purchase
By Sara Rosenberg
New York, Jan. 29 – Comtech Telecommunications Corp. plans on getting a new $800 million secured credit facility to help fund its acquisition of Gilat Satellite Networks Ltd., according to news release.
Citibank, M&T Bank, Santander Bank, BMO Harris Bank, Regions Bank, Israel Discount Bank of New York and Goldman Sachs Bank USA are providing the credit facility.
The company expects the terms of the facility will be based on a net leverage ratio providing significant flexibility.
The cash interest rate on the facility is anticipated to be around 4% to 5% on an annual basis, before any origination fees.
Other funds for the acquisition will come from cash on hand.
Under the agreement, Gilat shareholders will receive total consideration of $10.25 per share, comprised of $7.18 per share in cash and 0.08425 of a share of Comtech common stock per Gilat share. The transaction has an enterprise value of about $532.5 million.
Upon completion of the transaction, Gilat’s shareholders will own about 16.1% of the combined company.
Net leverage is expected to be about 3.85x, but the plan is to reduce leverage to around 3x within 12 months.
Closing is targeted for late in Comtech’s fiscal year 2020 or the first part of its fiscal 2021, subject to customary conditions.
Comtech is a Melville, N.Y.-based designer, developer, producer and marketer of innovative products, systems and services for advanced communications solutions. Gilat is an Israel-based provider of satellite networking technology, solutions and services.
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