Mass. firm to buy Micronetics for $75m

Micronetics Inc., a Hudson-based defense subcontractor and one of the few small public companies still based in New Hampshire, will be acquired by the much larger Mercury Computer Systems Inc. of Chelmsford, Mass., for about $75.4 million, Mercury announced on Sunday.The deal, which still has to be approved by regulators and Micronetics shareholders, will mean $14.80 a share, double the stock’s Friday close of $7.49. That’s a nice reward for shareholders who stuck with the company — the stock dipped below $3 a share in 2009, the year the company lost nearly $10 million.But the company has slowly been earning that back, and last fiscal year (which ended March 31) it ended up with $3.4 million in net income (74 cents a diluted share) and increased its sales to $46 million, 30 percent higher than the previous year.The Micronetics board and top executives as well as a major stockholder favor the action, pledging their shares, which represents about 20 percent of the company.If the deal is approved, the group will get about a fifth of the $71.7 million in cash paid for Micronetics (the rest of the consideration being the assumption of its $3.7 million net debt).It’s unclear what the merger would mean to Micronetics’ 208 employees based in Hudson as well as New Jersey and California. The merger agreement does obligate Mercury to continue current wages and benefits, though that could change in the future. It does not specify whether the employees will be retained.Micronetics designs and manufactures microwave and radio frequency subsystems and components for the defense industry and some commercial customers. Shareholder equity was at $18.7 million at the end of March.Mercury Computer manufactures and markets signal and image processing sub-systems and software for specialized defense and commercial computing markets The company had $229 million in revenues in fiscal 2011 (which ended June 30, 2011), with net income of $18.4 million, or 73 cents a share.In its last quarter, the company earned $70 million in revenues, resulting in net income of $5.24 million. Total shareholders equity was at $325 million at the end of the quarter. – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

Categories: News