Defense Heavyweight Makes Microwaves Play

Attempting to establish a strong foothold in the RF/microwave industry, Chelmsford, MA-based Mercury Computer Systems ( has signed an agreement to acquire Micronetics ( A provider of intelligence, surveillance, and reconnaissance (ISR) and electronic-warfare (EW) subsystems for defense prime contractors, 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).

Based in Hudson, NH, Micronetics designs and manufactures RF/microwave subsystems and components used in defense and commercial applications. These include EW, radar, electronic countermeasures (ECM), satellite communications (satcom), and commercial wireless products. Approximately 78% of the company’s revenues are defense-related.

For its fiscal year ended March 31, Micronetics reported revenues of $46 million with net income of $3.4 million. The firm has more than 200 US-based employees with additional manufacturing sites in West Caldwell, NJ; Ewing, NJ; and Manteca, CA.

The acquisition is subject to customary closing conditions and the approval of Micronetics’ shareholders. The boards of directors of both companies have unanimously approved the transaction. At present, the deal is expected to close within the first quarter of Mercury’s 2013 fiscal year.

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