CPI International (Nasdaq: CPII) announced today that it agreed to sell to itself to New York-based private equity firm Veritas Capital for US$327.8 million, or US$19.50 per share in cash, representing a 35% premium over CPI’s closing share price yesterday.
Including debt, the deal is valued at $525 million.
CPI, based in Palo Alto, California, is a provider of microwave, radio frequency, power and control products for the defence, communications, and medical industries.
For the fiscal year ended October 2, 2009, CPI recorded about $23.5 million in profits on revenues of roughly $333 million.
The deal is subject to shareholder approval as well as customary closing conditions.
CPI stockholders representing about 49% of the company’s outstanding shares have entered into an agreement with Veritas Capital, which specializes in making investments in the government sector, to vote in favour of the transaction.
Since the announcement, CPI’s stock has surged 34% on the pre-market on Friday morning.