CMTL - Comtech (CMTL) - Acacia Research Offers to Buy Comtech for $30 Share

Acquisition Offer. Yesterday, Acacia Research (NASDAQ:ACTG) made an unsolicited and nonbinding offer to acquire Comtech for $790 million in cash, or $30 per share. The offer price is a 39% premium to Comtech's closing share price on Friday. CMTL shares jumped 26% to close at $27.20 on the news. Comtech’s Board is evaluating the proposal in consultation with independent advisors.Who Is Acacia? Historically, Acacia's legacy business was investing in, licensing, and enforcing patented technologies. More recently, the Company has sought to acquire undervalued businesses with a primary focus on mature technology, life sciences, industrial, and certain financial services segments, and pursue opportunities for value creation that leverage Acacia’s significant capital resources as well as its expertise in corporate governance and operational restructuring. Acacia is led by private equity and hedge fund veteran Clifford Press.Starboard Kicker. Acacia is backed by activist hedge fund Starboard Value and Starboard Value managing director Jonathan Sagal sits on Acacia’s board. Two years ago Starboard Value agreed to provide as much as $400 million in capital for strategic investments and acquisitions.Would Outerbridge Be Satisfied? Given Outerbridge's statement that it valued Comtech in the $32-$40 per share range and, more recently, provided a potential value of Comtech's 911 business that alone could be worth its value range, on the face it would suggest Outerbridge would be looking for more than $30.Maintaining Market Perform. As we believe the Acacia offer to be insufficient and given our expectations for difficult comparisons during the first half of fiscal 2022, we are maintaining our Market Perform rating. While we continue to believe in the long-term prospects of the Company, based on our operating expectations, we think the shares will remain in a narrow range until positive operating momentum materializes. Read More >>