Hey Adam-I probably won't have much time to analyze CMTL until early Dec. I did take a postiion today on the selloff open. Having a 10% haircut with a solid balance sheet and good dividend coverage along with a relatively small premium for TSYS was enough for me to take a flyer. Nice to be up about 5% already and I really think Mark Jordon will come out with some favorable remarks soon based upon his histoy with both companies. Should provide a little assistance.
Not a big surprise to see this acquisition given the actiivism and board committee to explore. Seems like a relatively modest premium though CMTL had seen a pull back after their earnings miss and TSYS has been pretty strong this year. I allocated 25% of my TSYS invesment back into Comtech as a flyer. Solid balance sheet. 10% deal pull back discount. 5+% yield with solid coverage ratio. I think they can do even better than the announced synergies as i've always felt TSYS was bloated, especially in G&A.
Still holding a small position here but can't justify increasing given te lackluster performance of late. Need to get some of these options converted to funded orders.
I added another blog post on SA about deal. The amount of leverage and likelihood of a capital raise are reasons why I'm going cautious on CMTL for now . Will do more analysis after the Dec conference call to har more.