May 11, 2010 (FinancialWire) — CPI International, Inc. (NASDAQ: CPII) said it has signed a definitive merger agreement with Comtech Telecommunications Corp. (NASDAQ: CMTL) under which Comtech will purchase CPI in a cash and stock transaction with an enterprise value of approximately $472.3 million.

Comtech said it will fund the acquisition by redeploying around$372 million of its existing cash plus the issuance of around 4.4 million shares of Comtech common stock.  All existing CPI debt is anticipated to be repaid upon the closing of the transaction, according to CPI.

Based on the May 7 closing price of Comtech stock, which was $31.06, CPI shareholders will receive a combination of cash and stock that is currently valued at around$16.40 per CPI common share.

The amount represents a premium of 25.7 percent as compared to the last closing price of CPI common stock and 21.3 percent as compared to the last 30 trading day average closing price.

CPI's senior executive management and corporate team are expected to stay in their current or similar roles and will work directly with Comtech management after the transaction closes, according to CPI.

California-based CPI International is the parent company of Communications & Power Industries, Inc., a provider of microwave, radio frequency, power and control solutions for critical defense, communications, medical, scientific and other applications. The firm develops, manufactures and distributes products used to generate, amplify, transmit and receive high-power/high-frequency microwave and radio frequency signals and/or provide power and control for various applications.

New York-based Comtech Telecommunications designs, develops, produces and markets products, systems and services for advanced communications solutions. Comtech conducts business through three complementary segments: telecommunications transmission, mobile data communications and RF microwave amplifiers.  

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