May 12, 2010 (FinancialWire) — Comtech Telecommunications Corp. (NASDAQ: CMTL) and CPI International, Inc. (NASDAQ: CPII) have signed a definitive merger agreement under which Comtech will purchase CPI in a cash and stock transaction with an enterprise value of approximately $472.3 million.

Comtech will fund the acquisition by redeploying approximately $372.0 million of its existing cash and will issue approximately 4.4 million shares of Comtech common stock. CPI's sales and EBITDA were $338.5 million and $56.4 million, respectively, for its last four fiscal quarters ended January 1, 2010.

Based on the May 7, 2010 closing price of Comtech stock, which was $31.06, CPI shareholders will receive a combination of cash and stock that is currently valued at approximately $16.40 per CPI common share. This amount represents a premium of 25.7 percent as compared to the last closing trading price of CPI common stock and 21.3 percent as compared to the last 30 trading day average closing price.

The ultimate amount of consideration that a CPI shareholder will receive will be equal to a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing, provided that the fraction shall not be greater than 0.2382 nor less than 0.2132. Based on the May 7, 2010 closing price of Comtech stock which was $31.06, the fraction was equal to 0.2382 and was currently valued at $7.40 per CPI share.

All existing CPI debt is anticipated to be repaid upon the closing of the transaction at which time Comtech, on a pro-forma basis and excluding the impact of any additional acquisitions, is anticipated to have between $150.0 million and $200.0 million of deployable cash.

Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. CPI International, Inc., headquartered in Palo Alto, California, 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.

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