Comtech Telecommunications from New York announced an agreement to acquire Gilat Satellite Networks from Petah Tikva (near Tel Aviv) for approximately $532.5 million. This is a cash and stock transaction of which 70% will be paid in cash and 30% in Comtech common stock. Gilat provides satellite ground stations and in-flight connectivity solutions and services, based on its satellite networking technology.
Gilat is planned to become a wholly owned subsidiary of Comtech and will maintain its brand and its corporate headquarters and research and development facility in Petah Tikva, Israel under the leadership of Yona Ovadia, Gilat’s current CEO. No Comtech or Gilat facility locations are expected to be closed as a result of the transaction. Gilat expects to achieve 2019 annual sales of $260-$270 million. Comtech announced on December 2019 that it expects to achieve sales of $712-$732 million in 2019.
The combined companies would employ approximately 3,000 people and offer satellite technology, public safety and location technology and secure wireless solutions to commercial and government customers around the world. Fred Kornberg, Chairman of the Board and CEO of Comtech, said that The combination of accelerating satellite connectivity demand, and the increasing availability of low-cost satellite bandwidth, makes this a perfect time to unify Comtech and Gilat’s solutions. “Gilat is an exceptional business that has developed extraordinary technology and has a well-respected product portfolio supported by strong research and development capabilities.”
Gilat is well positioned to take part in the new Low Earth Orbit (LEO) Communications Satellite Constellations. Last November it achieved the fastest ever modem speeds of 1.2 Gbps total throughput over Telesat’s Phase 1 LEO satellite. This industry milestone demonstrates the potential of high throughput Non-Geostationary Orbit (NGSO) satellite constellations. The combination of high throughput provided by Gilat’s technology and the low latency from NGSO is considered essential for delay-sensitive applications such as 5G – which is a main target market of Comtech.