GILT - Comtech Telecom gains after activist urges strategic review

koto_feja/E+ via Getty Images Comtech Telecommunications (CMTL) rose 5.5% after activist Outerbridge Capital Management urged the company to explore alternatives, including a sale. Outerbridge delivered a letter to Comtech's board to review strategic alternatives. Outerbridge and its affiliates own over 1% of Comtech's outstanding shares. "The Company should immediately retain a financial advisor to conduct a fulsome, clear-eyed, and dispassionate review of strategic alternatives," Outerbridge's Chief Investment Officer Rory Wallace wrote in the letter. Outerbridge sees the potential for Comtech to see 50% upside in a potential at $32/share if it were to be sold at 12X CY22 EBITDA, which is in-line with peer valuations. Upside to $40 could "easily be justified given Comtech’s defensible market leadership in multiple high-growth areas." Recall that last year Comtech attempted to merge with Gilat Satellite (GILT), though the agreement was terminated in October. Last week, Comtech Telecom falls after slow revenues, downside guidance. In

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Comtech Telecom gains after activist urges strategic review