Comtech Telecommunications Corp. (CMTL) experienced a significant pre-market surge of 15.73% on Monday. The sharp move followed a major corporate announcement from the company.

The communications technology firm announced it has entered into a definitive agreement to sell most of its Satellite and Space Communications (S&S) segment to Gilat Satellite Networks Ltd. for $157.5 million, with $10 million paid at signing. The transaction, subject to regulatory approvals, is expected to close in the fourth calendar quarter of 2026.

Comtech anticipates net cash proceeds from the deal to be between $143 million and $145 million, which it plans to use primarily to reduce debt, prepaying 65% of its senior secured credit facility and 35% of subordinated debt. The divestment marks a strategic shift for Comtech to focus on its public safety technology business under the Allerium brand. The company estimates the move will lead to annual cost savings of approximately $11 million to $13 million and projects pro forma adjusted EBITDA for the retained business at $33 million to $35 million.