xG Technology Inc (NASDAQ:XGTI) announced that it has signed the final definitive business purchase agreement to acquire Vislink Communication Systems (“Vislink”) from Vislink, Plc. All substantive terms of the acquisition, which was originally announced on Oct. 20, 2016, have been agreed upon by the respective parties and due diligence has been completed. The agreement is subject to Vislink shareholder approval, and funding of the acquisition is expected to be finalized thereafter.
The Vislink acquisition gives xG a market-leading position in delivering end-to-end video capture/transmit/receive solutions to broadcast, sports and entertainment, and mission-critical public safety and defense sectors worldwide. The integration of Vislink will add significant revenue to xG’s overall operations and offer the opportunity to realize numerous synergies with its IMT business unit. At present, there is comparatively little overlap between IMT and Vislink in the areas of product offerings, sales channels, and market coverage, which increases the potential for new and expanded business wins for both companies.
George Schmitt, CEO and Board Chairman of xG Technology, said, “The Vislink acquisition represents a transformational step for xG Technology, and we believe it will help xG realize overall revenues of at least $60 million in 2017. There are impressive sales, technology, and manufacturing synergies between Vislink and IMT which will be realized as we integrate the operations in 2017. In addition to providing us a position of market prominence in delivering customized video technology systems, this acquisition offers new opportunities to incorporate xG’s patented interference mitigation and spectrum sharing technologies. Finally, we would like to welcome our new colleagues from Vislink into our company.”
Roger Branton, CFO of xG Technology, said, “The Vislink deal, which builds upon our prior purchase of IMT, underscores our plan to effect strategic acquisitions that further the Company’s long-term growth objectives. In the same way that we were successful in achieving efficiencies in all our business operating areas after acquiring IMT, we expect the Vislink acquisition to result in significant cost savings once it is fully integrated.”
“The xG Technology brand and business unit IMT are leaders in communication and digital microwave systems serving the Broadcast, Sports & Entertainment and MAG (Military, Aerospace & Government) markets. We are very excited to become part of the xG Technology family,” said James Walton, CEO of Vislink Communication Systems. “The product and technology synergies between Vislink and IMT will create a formidable alliance and further strengthen and expand our solutions for secure, high-quality video capture and delivery. I am confident that this transaction will significantly increase the global foothold of our market leading wireless camera and satellite communications systems. Collaboratively, Vislink Communication Systems and IMT will develop new marketing channels, strengthen innovative technology integration, and enrichen our global depth of innovative solutions within broadcast and law enforcement markets.” (Original Source)
Shares of XG Technology are currently rising 25.22% to $2.88, or up $0.58 in pre-market trading Monday. XGTI has a 1-year high of $34.68 and a 1-year low of $2.02. The stock’s 50-day moving average is $0.40 and its 200-day moving average is $0.48.
On the ratings front, Roth Capital analyst William Gibson reiterated a Hold rating on XGTI, with a price target of $0.50, in a report issued on November 21. The current price target represents a potential downside of 78% from where the stock is currently trading. According to TipRanks.com, Gibson has a yearly average loss of 5.6%, a 42% success rate, and is ranked #3744 out of 4283 analysts.
xG Technology, Inc. engages in the development of patented wireless communications and spectrum sharing technologies. It operates through the following segments: Broadcast, Sports and Entertainment, and Government/Surveillance. The Broadcast segment includes a line of margin receiver products including DR3, crx6, and CIRAS. The Sport and Entertainment segment offers microLite, available in both licensed and unlicensed frequency bands. The Government/Surveillance segment sells IMT, MiniMobile Commander and Mobile Commander.