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Mercury Computer Systems (MRCY) To Buy Micronetics (NOIZ) For $14.80/Share, 97.6 Pct Premium

 June 11, 2012 08:07 AM

(By Balaseshan) Mercury Computer Systems Inc. (NASDAQ:MRCY), a digital signal and image processing systems and software maker, has agreed to buy microwave and radio frequency (RF) components maker Micronetics Inc. (NASDAQ:NOIZ) for $14.80 per share. Following the news, the shares of NOIZ jumped 92.26% in premarket.

The deal represents a 97.6% premium to Micronetics' Friday close of $7.49. The merger terms represents a fully diluted equity value of about $71.7 million and an enterprise value of about $75.4 million, including $3.7 million of net debt as of March 31, 2012.

[Related -U.S. Stocks Closed Sharply Lower As Spain Weighs; Hot Stocks: CNC, DMND, OCR, ES, ZAZA, INMD, NOIZ]

The acquisition will be funded with available cash and is expected to be immediately accretive to EBITDA. Subject to finalization of purchase accounting, the transaction is also anticipated to be accretive on a GAAP basis within 12 months of the closing date.

Micronetics is a designer and manufacturer of microwave and RF subsystems and components for defense and commercial customers. The acquisition would create a unique, scalable microwave, RF and digital solutions platform.

The boards of directors of both Mercury and Micronetics have unanimously approved the transaction and the Micronetics board has recommended that Micronetics' shareholders vote in favor of the transaction.

[Related -U.S. Futures Advance On Spain Deal; Hot Stocks: FRX, CNC, NAV, INMD, NOIZ]

The transaction is currently expected to close within Mercury's fiscal 2013 first quarter ending September 30, 2012.

For its fiscal year ended March 31, 2012, Micronetics reported revenue of $46.0 million, a 30% increase from last year, with net income of $3.4 million which was more than double earnings from the previous year. About 78% of Micronetics' revenue are defense-related.

Micronetics had 208 employees as of March 31, 2012, all based in the U.S., including manufacturing locations in Hudson, NH, West Caldwell and Ewing, NJ, and Manteca, CA.

MRCY closed Friday's regular session down 0.43% at $11.68, while NOIZ ended down 3.23% at $7.49.

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