Comtech Telecommunications Corp. is in position to buy more than 88 percent of Annapolis-based TeleCommunication Systems Inc. stock, paving the way for its acquisition of the large Baltimore-area company to go forward after several extensions.
Melville, N.Y.-based Comtech (NASDAQ: CMTL) plans to complete its acquisition of TeleCommunication Systems Tuesday, consolidating wireless communication and government contracting companies. The move, a $430.8 million deal first announced in November, will make TeleCommunication Systems (NASDAQ: TSYS) a Comtech subsidiary.
Closing is expected after Comtech extended an offer for TeleCommunication Systems shares three times. The New York company extended its tender offer so that conditions could be satisfied but did not point to a specific issue that was pending. As of the last extension on Feb. 2, about 36 percent of TeleCommunication Systems shares were tendered.
The offer officially expired at 5 p.m. Thursday with 88.32 percent of TeleCommunication Systems outstanding stock tendered. That's 55.9 million shares.
Comtech offered $5 per share. Shares not tendered will be converted into the right to receive $5 per share after the acquisition.
TeleCommunication Systems is the 14th-largest public company in the Baltimore region, according to Business Journals research. It employs nearly 1,100 people on 2014 revenue of $360 million. But it has faced activist investors unhappy with its corporate governance and financial performance after it lost $1.7 million in 2014.
Comtech's net sales totaled $307.3 million in 2015. It anticipates $12 million in cost savings in the second year after the acquisition closes, with $8 million coming in the first year.