RF INDUSTRIES, LTD. (NASDAQ: RFIL) announced today that it has completed the acquisition of East Brunswick, New Jersey-based Comnet Telecom Supply, Inc. ("Comnet"), a supplier of telecommunications and data products, for a total purchase price of $4,150,000, consisting of $3,050,000 in cash, and 252,381 shares of RFI's common stock valued at $1,060,000. Privately-owned Comnet had revenues of approximately $9.6 million for the twelve-month period ended October 31, 2014.
Robert Portera, the sole owner of Comnet, agreed to a two year employment contract with the Company that provides for a base salary and potential bonus. Mr. Portera also has an earn-out provision pursuant to which he can earn up to an additional $1,360,000 if Comnet meets certain financial milestones in the next two years.
"This acquisition expands our fiber optic cabling capabilities and customer base to include large national manufacturers of and distributors of telecommunications equipment and products. Comnet, like Cables Unlimited, is a Corning Cables System CAH Connections Gold Program member, a limited group of companies in the United States permitted to manufacture fiber optic cable assemblies backed by Corning's extended warranty. Not only does this acquisition reduce the Company's dependence on sales at our other major divisions, it provides a growth opportunity for our current fiber optic and custom cabling product lines. We anticipate that Comnet's growing sales will be accretive to the Company's profitability and cash flow, after one-time expenses related to the integration of the business," said Howard Hill, CEO of RF Industries.
Comnet Telecom manufactures and distributes standard and custom equipment and cabling products used by telecommunications carriers, co-location center operators and other telecommunications and data center companies in the United States. Products include fiber optic cable, copper cabling, custom patch cord assemblies, transceivers/converters and other data center equipment (including server cabinets and network racks). The Company's fiber optic products are manufactured in compliance with Corning Gold Certified standards at its facilities in East Brunswick, New Jersey.