Mercury Systems (MRCY) acquires Pentek

Mercury Systems, Inc., (NASDAQ: MRCY, www.mrcy.com), a leader in trusted, secure mission-critical technologies for aerospace and defense, today announced that it has acquired Pentek Technologies, LLC and Pentek Systems, Inc. (collectively, “Pentek”). Based in Upper Saddle River, N.J., Pentek is a leading designer and manufacturer of ruggedized, high-performance, commercial off-the-shelf (“COTS”) software-defined radio and data acquisition boards, recording systems and subsystems for high-end commercial and defense applications.

Under the terms of the purchase agreement, Mercury acquired Pentek for an all-cash purchase price of $65.0 million, subject to net working capital and net debt adjustments. A portion of the acquisition is expected to be treated as an asset sale for tax purposes. The acquisition and associated transaction expenses were funded through a combination of cash on hand and Mercury’s existing revolving credit facility. For Mercury’s fiscal year ending July 1, 2022, Pentek is expected to generate revenue of approximately $20 million with profit margins in line with Mercury’s. The acquisition is expected to be immediately accretive to adjusted EPS.

“The acquisition of Pentek is an excellent fit for our market and low-risk content expansion strategy,” said Mark Aslett, Mercury’s president and chief executive officer. “Their capabilities add scale and breadth to Mercury’s existing mixed-signal product portfolio and deepen our penetration into our core radar, electronic warfare (EW), and signals intelligence markets. Like our previous acquisitions in the RF and microwave domain, the acquisition of Pentek doesn’t just provide important new capabilities for our customers; it also enables us to grow the size of our total addressable market. We are very pleased to welcome the Pentek team to Mercury,” Aslett concluded.

“I'm excited about the opportunity to bring new capabilities to Mercury's impressive mix of pre-integrated subsystems in support of numerous aerospace and defense programs and platforms," said Rodger Hosking, vice president, Pentek. "Our product-focused business model will provide a diverse portfolio of building blocks enabling low-risk content expansion at the module and subsystems levels. Further, there is an excellent fit strategically and culturally between the two businesses with a common focus on innovation that matters."

Mercury envisions, creates and delivers innovative technology solutions purpose-built to meet its customers’ most pressing high-tech needs. For more information, visit mrcy.com or contact Mercury at (866) 627-6951 or [email protected].

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