White Hat Capital Partners and Magnetar Capital have agreed to purchase convertible preferred stock from Comtech Telecommunications (Nasdaq: CMTL) under a strategic investment deal with an initial value of $100 million.
Comtech said Monday it will use the money to establish broadband technology centers in Arizona and England, pursue new business opportunities to modernize 911 public safety systems and implement a merger-and-acquisition strategy.
Under the agreement, the two investment firms will initially acquire preferred shares for $24.50 per share and may increase the conversion price to $26 apiece based on Comtech’s financial performance for its 2022 fiscal year.
The transaction also includes a provision for both investors to preferred stock worth up to $25 million.
Melville, New York-based Comtech received exclusive financial advisory services from Goldman Sachs and legal advice from Proskauer Rose on the deal.
Schulte Roth & Zabel and Willkie Farr & Gallagher acted as legal advisers to Magnetar and White Hat, respectively.
The investment comes two weeks after Comtech announced that President and Chief Operating Officer Michael Porcelain will succeed Fred Kornberg as its CEO by the end of the year.