Veritas Capital to buy CPI Int’l for $19.50/share

BANGALORE (BestGrowthStock) – CPI International Inc (CPII.O: ) agreed to be bought by an affiliate of private-equity firm Veritas Capital for $19.50 per share in cash, three months after larger rival Comtech Telecommunications (CMTL.O: ) dropped plans to buy the telecom equipment maker.

The offer from New York-based Veritas Capital, which focuses on the defense and government-services sector, is at a 35 percent premium to CPI’s Wednesday close. The deal is valued at about $525 million, CPI said.

In September, Comtech had offered to pay about $372 million in cash and issue about 4.4 million shares for CPI, in what could have been its largest acquisition ever.

Veritas Capital also owns Aeroflex Inc, a provider of microelectronic and testing equipment to aerospace markets, and Vangent, which provides information management and business processing services.

Earlier this year, Veritas sold military-services contractor DynCorp International to Cerberus Capital Management (CBS.UL: ) for $1 billion.

Shares of Palo Alto, California-based CPI, which makes microwave and radio-frequency products for defense, communications, medical and other applications, rose 29 percent to $18.65 in trading before the bell.

They have risen 43 percent over the last year.

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Vinu Pilakkott and Don Sebastian)

Veritas Capital to buy CPI Int’l for $19.50/share