Satellite connectivity drives Comtech acquisition of Gilat

Comtech Telecommunications is buying Gilat Satellite Networks for $532.5m, it has been announced.

The Israel-based Gilat is a provider of satellite-based broadband communications. Its VSAT (very small aperture terminal) ground stations can address High Throughput Satellites (HTS) and Very High Throughput Satellites (VHTS), as well as Non GEO Satellite Orbits (NGSO) constellations.

The benefits for Comtech are anticipated to include expanding Comtech’s product portfolio with complementary technologies, including Gilat’s high-performance TDMA-based satellite modems and its next generation solid-state amplifiers.

It also addresses what Comtech sees as rapidly growing in-flight connectivity and cellular backhaul markets. These are expected to expand given the availability of lower-cost bandwidth and the adoption of satellite technologies into the 5G cellular backhaul ecosystem.

The acquisition will be a cash and stock transaction for $10.25 per Gilat ordinary share, says Comtech. of which 70% will be paid in cash and 30% in Comtech common stock.

“The acquisition better positions Comtech to take advantage of key marketplace trends, particularly the growing demand for satellite connectivity and the enormous long-term opportunity set that is emerging in the secure wireless communications market,” said Fred Kornberg, Chairman of the Board and CEO of Comtech (pictured).

“I believe 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 and offer our combined customers best-in-class platform-agnostic satellite ground station technologies. Gilat is an exceptional business that has developed extraordinary technology and has a well-respected product portfolio supported by strong research and development capabilities. I welcome Gilat’s entire talented workforce to the Comtech family.”

For Gilat’s part, the Chairman of the Board, Dov Baharav, said:

“The Gilat Board of Directors and management believe this highly strategic combination is compelling. It is an excellent outcome for our shareholders who receive both cash and an equity interest in a strong company with a broader range of products and the benefits of combined expertise and resources that is well positioned to create future value against a highly favorable industry backdrop.”

Gilat’s customers include satellite operators, major service providers and tier-1 mobile network operators, it says.