By Mike Stone and Soyoung Kim
NEW YORK (StartName) – Communications equipment maker Comtech Telecommunications Corp said on Monday it is exploring strategic alternatives, including a possible merger or sale of the company, confirming a StartName report earlier in the day.
Citing people familiar with the matter, StartName reported Comtech has tapped investment bank Citigroup to review a potential sale and has received preliminary expressions of interest in recent weeks.
Comtech, which makes satellite-based communications equipment for commercial and government customers, confirmed it has retained Citigroup as its financial advisor and Proskauer Rose LLP as its legal adviser in connection with the strategic review.
Shares of Comtech jumped more than 12 percent in afternoon trading on news of a potential sale and closed 4.8 percent higher at $36.81, giving it a market capitalization of roughly $590 million.
Comtech had considered selling itself a few times in the past, and there is no guarantee the latest process will lead to a transaction, people familiar with the matter said.
Comtech has long been seen as a takeover candidate for larger aerospace and defense companies, and over the past several years has held multiple discussions with potential buyers such as Airbus parent EADS, people familiar with the matter have said.
Melville, New York-based Comtech has been developing more contracts for non-defense customers in recent years following the loss of its largest military contractors, which represented roughly half of the company’s total revenue for fiscal 2010 and 2011.
(Reporting by Mike Stone and Soyoung Kim in New York,; Editing by Meredith Mazzilli and Jonathan Oatis)