Stellant Systems, Inc. entered into an definitive agreement to acquire Power Systems Technology from Comtech Telecommunications Corp. (NasdaqGS:CMTL) for $40 million on October 11, 2023. The consideration includes total cash purchase price of $40 million, which includes a preliminary sales price of $35 million and contingent consideration up to $5 million based on the achievement of certain targets. Some or all of the net proceeds from this divestiture to meaningfully reduce our outstanding debt, leverage ratio and cash interest requirements. The transaction is subject to regulatory approvals and customary closing conditions and was unanimously approved by the board of directors of both companies. The transaction is expected to close by the end of October 2023. Michael J. Conroy, Sara B. Zablotney, Matthew S. Lovell, David M. Towarnicky and Douglas Ryder of Kirkland & Ellis LLP acted as legal advisor to Stellant Systems, Inc. Evercore Inc. acted as financial advisor and Morgan, Lewis & Bockius LLP acted as legal advisor to Comtech Telecommunications Corp. Damien C. Specht of Morrison & Foerster served as government contracts and regulatory counsel to Stellant Systems.

Stellant Systems, Inc. completed the acquisition of Power Systems Technology from Comtech Telecommunications Corp. (NasdaqGS:CMTL) on November 7, 2023. The preliminary sales price for this divestiture was $35.7 million in cash (including adjustments for estimated closing date net working capital and cash on hand), plus contingent consideration of up to $5 million based on the achievement of a revenue target or the receipt of an anticipated contract award as specified in the stock sale agreement. The sales price is subject to adjustment based on the final closing date net working capital of the divested business. Comtech received cash proceeds of $32.5 million at closing, net of $2.2 million of transaction costs and $1 million held in escrow until finalization of closing date net working capital.