Mercury completes purchase of Micronetics

Mercury Computer Systems didn't waste any time completing its acquisition of Micronetics Inc., closing the $75 million deal Wednesday, the day Micronetics shareholders approved it.Mercury — based in Chelmsford, Mass. — acquired the Hudson-based microwave defense contractor for $14.8 per share, the same terms as when the companies announced the deal last June. Mercury used its cash on hand to pay the shareholders $71.7 million, as well as Micronetics' $3.2 million debt.

"We're extremely pleased that the Micronetics transaction was completed on schedule; the next step is executing a seamless integration," said Mark Aslett, president and CEO of Mercury.

The closing came a week after Micronetics settled several class-action suits, which claimed that the company was on the upswing and could have gotten a better deal. The suits also said that not enough details were disclosed in the proxy. Micronetics didn't disclose much more, but did change the proxy to omit Micronetics CEO David Robbins from the list of top executives that would continue with the merged company. The terms of the settlement — which still needs to be finalized and approved by the courts — were not revealed. Nor was the totals of the shareholders' vote on Wednesday, though Tuesday's announcement did say that conditions of the merger were completed, including shareholder approval.

However, on Tuesday, Micronetics' quarterly filing with the U.S. Securities and Exchange Commission did reveal a few more tidbits. For one, Micronetics (now part of Mercury) might have to pay attorney fees.

For another, Micronetics carried an insurance policy which may cover some or all of the settlement subjection to a $150,000 retention. Secondly, merger-related expenses cost Micronetics $1.15 million in the first quarter of fiscal year '13, (ending June 30) and has cost about $600,000 since then. Thirdly, the company ended its last full quarter as a separate company with a net loss of $169,000, or 4 cents a share, as opposed to $564,000 profit in the same quarter the previous year.

Sales were slightly up: $10.6 million as opposed to $10 million even, so merger expenses might have made the difference.

Finally, the company reported that shareholders' equity was worth $18.6 million as of June 30, just slightly less than before the quarter started. But shareholders will get $71.7 million, about four times as much.