VIAVI Solutions and Spirent Communications agreed on a cash offer for the acquisition of Spirent (News - Alert), valued at $1,277 million. Spirent shareholders are set to receive 172.5 pence per share in cash, along with a special dividend of 2.5 pence per share instead of a final dividend for the year ending December 31, 2023. The acquisition, expected to close in H2 2024, is subject to customary closing conditions and regulatory approvals.
Spirent, best known for its automated test and assurance solutions, addresses challenges in testing 5G, SD-WAN, cloud, and autonomous vehicles. The company's strategic focus emphasizes customer-centricity, innovation for growth, and operational excellence, aiming to develop offerings for live networks and increase recurring revenue streams.
“Combining with VIAVI brings together a highly complementary product offering that can be marketed globally,” said Eric Updyke, Chief Executive Officer of Spirent. “It will enable Spirent to build on the strategic progress we have made to date, with a partner that has the scale and resources to capitalize on the long-term growth opportunities ahead. The combination of VIAVI and Spirent creates a stronger business that will be better able to compete, and we are confident in the opportunities this will bring for our stakeholders.”
VIAVI will fund the acquisition through existing cash, a $800 million 7-year term loan from Wells Fargo (News - Alert) Bank, N.A., and a $400 million investment from Silver Lake in the form of a senior convertible note. Ken Hao, Chairman of Silver Lake, will join the VIAVI Board of Directors. The acquisition is anticipated to create a leading provider of test, assurance, and security solutions, offering diversification and accelerated growth in adjacent market verticals.
The combined group will enhance engineering, research and development, and design capabilities to accelerate technology development, particularly in artificial intelligence, machine learning, security, cloud-native architecture, and automation. Operational efficiencies are expected to result in annual cost synergies of up to $75 million approximately two years post-acquisition. VIAVI will prioritize debt paydown using free cash flow generation after completion, aiming to lower leverage ratios over the long term.
“VIAVI is proud to help enable its global customers to pursue innovation across the wide range of industries it serves,” said Oleg Khaykin, President and CEO of VIAVI. “Combining our leading communications test and measurement and optical technologies and Spirent’s high-performance testing and assurance solutions is expected to deliver enhanced product solutions and applications, accelerate growth in new markets, and strengthen innovation through expanded engineering and design capabilities.”
“Further, we are uniting two teams with a shared passion for developing compelling and cutting-edge offerings for customers and a commitment to technological excellence. We are pleased to welcome a strategic, long-term investment from Silver Lake in connection with the Acquisition. Silver Lake has an outstanding track record of supporting leading technology companies through both organic growth investments and scale acquisitions,” said Khaykin.
Edited by
Greg Tavarez
