Comtech's Strategic Pivot
Comtech Sells Satellite Unit for $157.5M to Gilat, Accelerating Public Safety Focus
Anonymous
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Comtech CEO Ken Traub called the transaction “a significant milestone in Comtech’s transformation” and said the sale of most of the S&S segment, along with agreements with lenders and preferred stockholders, reflected “successful execution of our strategy.”
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Gilat CEO Adi Sfadia told Globes that Comtech’s business was heavily defense-oriented—“mainly for the US military,” with “over 70%” of activity for government institutions and militaries—arguing the acquisition would lift Gilat’s military exposure to “over 40%” of revenue from “just under 25% today.”
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Gilat said the combined operations would materially scale its defense business, projecting the deal would create “a company annual revenue of more than $700 million” and “adjusted EBITDA of $80 million,” and would enable it to more than double revenue of its defense division.
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Reporting on the acquired portfolio, Calcalist said the transferred technologies include troposcatter beyond-line-of-sight communications (using atmospheric reflections to transmit signals over hundreds of kilometers) and systems supporting LEO, MEO, and GEO satellites, with customers including the U.S. Department of Defense and other security agencies.
Comtech Telecommunications has agreed to sell most of its Satellite & Space Communications unit to Israel-based Gilat Satellite Networks for $157.5 million in cash, the companies announced June 15, 2026. Comtech will use the proceeds to slash its roughly $252.6 million debt load and relaunch itself as a pure-play public safety firm under the brand Allerium, according to Seeking Alpha.
Comtech CEO Ken Traub called the deal "a significant milestone in Comtech's transformation." Gilat CEO Adi Sfadia said the acquired business was "mainly for the U.S. military," with over 70% of its activity tied to government and military customers. Both companies' boards approved the deal unanimously. It is expected to close in Q4 2026, pending regulatory review, according to CityBiz.
Comtech's Six-Year Fall from Buyer to Seller
The deal is a striking reversal of fortunes. In January 2020, Comtech was the aggressor — it tried to buy Gilat for $577 million. That deal collapsed during the COVID-19 pandemic, and Comtech paid Gilat a $70 million settlement to walk away, according to Calcalist. Now Gilat is buying Comtech's core satellite assets for a fraction of that price.
Comtech's financial health had deteriorated sharply. Its Altman Z-Score — a measure of bankruptcy risk — recently sat at 1.25, placing it in a "distress zone," according to GuruFocus. CEO Ken Traub, who took the helm in early 2025, launched a turnaround plan centered on shedding capital-heavy hardware businesses and focusing on higher-margin software. The Gilat deal is the centerpiece of that plan.
Gilat Doubles Down on U.S. Defense with Tropo Tech
For Gilat, the acquisition is a major push into the U.S. defense market. The deal will lift Gilat's military revenue from just under 25% of total sales to over 40%, Sfadia told Calcalist. Gilat projects the combined company will generate more than $700 million in annual revenue and $80 million in adjusted EBITDA.
The acquired portfolio includes troposcatter technology — a system that bounces signals off the atmosphere to transmit data over hundreds of kilometers, even without line-of-sight. It also includes ground systems supporting LEO, MEO, and GEO satellites. Customers include the U.S. Department of Defense and other security agencies, according to Calcalist. Gilat said it can fund the purchase using its own cash and existing debt facilities.
Comtech Nets Up to $145M After Costs, Keeps Cyber Assets
Comtech expects net proceeds of $143 million to $145 million after paying $12.5 million to $14.5 million in transaction expenses, according to Seeking Alpha. Gilat paid $10 million at signing. Comtech will retain certain cyber-focused assets from the satellite unit, plus rights to collect on select accounts receivable. The company also keeps a portfolio generating roughly $249 million in annual sales with a $554 million funded backlog.
Comtech shares rose 5.2% to $4.83 immediately after the announcement. The stock had already gained about 148% over the prior year as investors anticipated a major strategic move. The company plans to spend $12 million to $14 million on transition costs through fiscal year 2027, and expects to save $11 million to $13 million annually once the restructuring is done, according to Advanced Television.
CFIUS Review Looms as Gilat Absorbs Pentagon Supplier
The deal faces a significant regulatory hurdle. Because Gilat is an Israeli company buying sensitive U.S. defense assets — including troposcatter and space electronics used by the Pentagon — it will undergo a rigorous review by CFIUS, the U.S. government body that screens foreign acquisitions for national security risks. That process is expected to run through 2026. The deal's Q4 2026 close target depends on clearing that review, according to Advanced Television.
Once the sale closes, Comtech will operate entirely as Allerium, its public safety brand. Allerium runs Next Generation 9-1-1 systems for states including Kentucky and Oklahoma. Jeff Robertson, Allerium's president, said the company is "the first to bring together the complete emergency response ecosystem." Gilat, meanwhile, will own a major U.S. manufacturing and engineering footprint — and a direct line into some of the Pentagon's most critical communications programs.
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