Acacia Research seeks to buy Comtech Telecommunications-sources

Acacia Research

01/11/2021 12:12

By Svea Herbst-Bayliss
    Nov 1 (Reuters) - Acacia Research Corp  ACTG.O , which buys
businesses in sectors such as technology and healthcare, has
made an offer to acquire Comtech Telecommunications Corp
 CMTL.O , a provider of wireless communication systems for
police and other emergency services, for $790 million in cash,
people familiar with the offer said.
    The bid comes as Comtech faces pressure from one of its
shareholders, Outerbridge Capital Management LLC, to explore a
sale of the entire company. Comtech angered Outerbridge last
month when it announced a deal to sell a $100 million stake in
itself through a PIPE deal to hedge funds Magnetar Capital LLC
and White Hat Capital Partners LP. 
    Acacia, which is backed by activist hedge fund Starboard
Value, has offered $30 per share in cash for Comtech, the
sources said, a 39% premium to Comtech's closing share price on
Friday. There is no certainty that Comtech will engage in
negotiations or that any deal will be reached, the sources
added, requesting anonymity because the matter is confidential. 
    Comtech did not immediately respond to a request for
comment. 
    Acacia agreed with Starboard two years ago that the hedge
fund would provide as much as $400 million in capital for
strategic investments and acquisitions. Acacia is led by private
equity and hedge fund veteran Clifford Press.
    Outerbridge has challenged Comtech by nominating three
directors to the company's five-member board. Comtech
shareholders will elect board members at the company's annual
meeting in December.
    Comtech said last month its chief executive Fred Kornberg
would be succeeded by its president and chief operating officer
Michael Porcelain. Outerbridge criticized the move, arguing that
Porcelain contributed to Comtech's poor stock performance.
Outerbridge has also said the stake sale agreed last month
carried no premium and was expensive and dilutive to Comtech
shareholders.

 (Reporting by Svea Herbst-Bayliss in Boston; editing by Richard
Pullin)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))