2012-06-10Mercury Computer Systems to Acquire Micronetics, Inc.
- Micronetics
is a leading designer and manufacturer of microwave and RF subsystems and
components for defense and commercial customers
- Acquisition
would create a unique, scalable microwave, RF and digital solutions platform
- Transaction
is expected to be immediately accretive to EBITDA
CHELMSFORD, Mass. - June 10, 2012
- Mercury
Computer Systems, Inc. (NASDAQ: MRCY, www.mc.com),
a trusted provider of commercially developed application-ready ISR and EW
subsystems for defense prime contractors, today announced that it has signed a
definitive agreement to acquire Micronetics, Inc. (NASDAQ: NOIZ, www.micronetics.com),
a leading designer and manufacturer of microwave and radio frequency (RF)
subsystems and components for defense and commercial customers.
Pursuant
to the terms of the agreement, Mercury will acquire Micronetics via merger for $14.80
per share. This represents a fully diluted equity value of approximately $71.7
million and an enterprise value of approximately $75.4 million, including $3.7 million
of net debt as of March 31, 2012. The acquisition will be funded with available
cash and is expected to be immediately accretive to EBITDA. Subject to
finalization of purchase accounting, the transaction is also anticipated to be
accretive on a GAAP basis within 12 months of the closing date.
The
acquisition is subject to customary closing conditions, including approval
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if
necessary, and the approval of Micronetics’ shareholders. The boards of directors
of both Mercury and Micronetics have unanimously approved the transaction and the
Micronetics board has recommended that Micronetics’ shareholders vote in favor
of the transaction. The transaction is currently expected to close within
Mercury’s fiscal 2013 first quarter ending September 30, 2012.
“We
are pleased to have reached this agreement with Micronetics and are excited
about the prospects this combination will provide for our customers, employees,
and shareholders,” said Mark Aslett, President & CEO of Mercury. “The
proposed acquisition is well-aligned with our stated acquisition strategy of
growing our capabilities, services and offerings along the sensor processing
chain. Micronetics’ unique microwave and RF capabilities will enhance our
integrated digital and RF subsystem solutions for existing and next generation
defense and intelligence programs. This type of integrated solution is unique
in the marketplace and is in high demand by our defense prime customers.”
Based
in Hudson, NH, Micronetics designs and manufactures high performance microwave
and RF subsystems and components used in a variety of defense and commercial
applications, including electronic warfare, radar, electronic countermeasures, satellite
communications and commercial wireless products. For its fiscal year ended
March 31, 2012, Micronetics reported revenues of $46.0 million, a 30% increase
from the previous fiscal year, with net income of $3.4 million which was more
than double earnings from the previous fiscal year. Approximately 78% of
Micronetics' revenues are defense-related. Micronetics had 208 employees as of
March 31, 2012, all based in the U.S., including manufacturing locations in
Hudson, NH, West Caldwell and Ewing, NJ, and Manteca, CA.
For
more information on the acquisition, visit www.mc.com. In addition, Mercury
management will host a conference call at 8:30 a.m. EDT, Monday, June 11, 2012,
to discuss the acquisition. Company representatives may answer questions
concerning business developments and trends and other matters affecting the
Company, the responses to which may contain information that has not been
previously disclosed.
To listen to the conference call, dial (888) 271-8583 in
the U.S. and Canada, and (913) 312-0673 in all other countries. The conference ID
number is 6649175. Please call 5 to 10 minutes prior to the scheduled start
time. A replay of the call will be available by telephone from 11:30 a.m. EDT on Monday, June 11, 2012 through 11:30 a.m. EDT on Saturday, June 23, 2012. To access the replay,
dial (888) 203-1112 in
the U.S. and Canada, and (719) 457-0820 in all other countries. Enter access code 6649175.
About
Mercury Computer Systems, Inc. – Where Challenges Drive Innovation®
Mercury Computer Systems (www.mc.com, NASDAQ: MRCY) is a best-of-breed
provider of open, commercially developed, application-ready, multi-INT
subsystems for defense prime contractors. With more
than 30 years of experience in embedded computing, superior domain expertise in
radar, EW, EO/IR, C4I and sonar applications,
and more than 300 successful program deployments including Aegis, Global Hawk
and Predator, Mercury’s Services and Systems Integration (SSI) team leads the
industry in partnering with customers to design and integrate system-level
solutions that minimize program risk, maximize application portability and
accelerate customers’ time to market.
Mercury
is based in Chelmsford, Massachusetts, and serves customers worldwide through a
broad network of direct sales offices, subsidiaries and distributors.
Forward-Looking Safe Harbor Statement
This press release contains certain forward-looking statements, as
that term is defined in the Private Securities Litigation Reform Act of 1995,
including those relating to the proposed acquisition of Micronetics, Inc. and
the subsequent integration of, and the expected synergies from, the acquisition.
You can identify these statements by the use of the words “may,” “will,”
“could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,”
“estimate,” “project,” “intend,” “likely,” “probable, ” and similar
expressions. These statements include statements about the anticipated
accretive impact of the acquisition on Mercury’s financial results, the
anticipated enhanced capabilities to be offered by Mercury and the anticipated
timing for completion of the transaction. These forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from those projected or anticipated. Such risks and uncertainties include, but
are not limited to, the inability to obtain Micronetics stockholder approval
for the transaction, the inability to obtain regulatory approval for the
transaction, the inability to fully realize the expected benefits from
acquisitions or delays in realizing such benefits, and challenges in
integrating acquired businesses and achieving anticipated synergies, in
addition to continued funding of defense programs, the timing and amounts of
such funding, general economic and business conditions, including unforeseen
weakness in the Company’s markets, effects of continued geopolitical unrest and
regional conflicts, competition, changes in technology and methods of
marketing, delays in completing engineering and manufacturing programs, changes
in customer order patterns, changes in product mix, continued success in
technological advances and delivering technological innovations, changes in the
U.S. Government’s interpretation of federal procurement rules and regulations,
market acceptance of the Company's products, shortages in components,
production delays due to performance quality issues with outsourced components,
changes to export regulations, increases in tax rates, changes to generally
accepted accounting principles, difficulties in retaining key employees and
customers, unanticipated costs under fixed-price service and system integration
engagements, and various other factors beyond our control. These risks and
uncertainties also include such additional risk factors as are discussed in the
Company's filings with the U.S. Securities and Exchange Commission, including
its Annual Report on Form 10-K for the fiscal year ended June 30, 2011. The
Company cautions readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made. The Company undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made.
# # #
Contact:
Kevin Bisson, CFO
Mercury Computer Systems,
Inc.
978.967.1990
Challenges Drive Innovation, Ensemble and Echotek are registered trademarks and Application Ready Subsystem and ARS are trademarks of Mercury Computer Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.