Comtech Telecommunications Corp. (NASDAQ: CMTL) shares dropped handily in Friday’s session after the company announced the pricing of its secondary offering. The company expects to price its 7.145 million shares at $14 per share, with an overallotment option for an additional 1.072 million shares. At the maximum price, the entire offering is valued up to $115 million.
The offering is expected to close on June 22.
The underwriters for the offering are Citigroup and Jefferies acting as joint book-running managers. BMO and Raymond James are acting as additional book-running managers. Northland Securities, Ladenburg Thalmann, Noble International Investments and Santander Investment Securities are acting as co-managers.
Comtech designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The company sells products to a diverse customer base in the global commercial and government communications markets.
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The company works through three complementary business segments: telecommunications transmission, RF microwave amplifiers and mobile data communications.
Comtech intends to use the net proceeds of the common stock offering to repay borrowings under its secured credit facility, with the remainder going toward working capital and general corporate purposes.
So far in 2016, Comtech has underperformed the broad markets, with the stock down 17% (excluding Friday’s move). Over the past 52 weeks, the stock is down as much as 42%.
Shares of Comtech were trading down about 13.5% at $13.95 on Friday, with a consensus analyst price target of $28.40 and a 52-week trading range of $13.84 to $30.93.
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