VIAVI Solutions to acquire Spirent Communications to help achieve greater engineering, research and development and design capabilities. The acquisition is said to accelerate new technology development and product innovation and provide diversification and accelerated growth in attractive, adjacent market verticals.
VIAVI Solutions to acquire Spirent Communications. The agreement is on the terms of a cash offer for Spirent which the Spirent Board intends to unanimously recommend (the “Acquisition”).
With the acquisition, VIAVI will get access to Spirent’s massive product portfolios and services. The acquisition will also open doors towards newer markets and avenues’- combine capabilities to deliver solutions for various markets and applications.
As VIAVI acquires Spirent, it will enable to create a to provide extensive test, assurance and security solutions for research and development labs, service providers, data centers and mission-critical infrastructure.
The Acquisition price values Spirent at approximately £1,005 million, or $1,277 million based on the British pound sterling to U.S. dollar exchange rate on March 4, 2024.
The combination of VIAVI and Spirent’s current and future product offerings will position the combined group to bring to market innovative solutions across high-growth cloud service providers, enterprise/IT networks, 5G private networks, 6G+ and positioning, navigation and timing verticals.
Under the terms of the Acquisition, Spirent Shareholders will receive 172.5 pence per Spirent share in cash (the Acquisition price). Spirent Shareholders will also receive a special dividend of 2.5 pence per Spirent share in lieu of a final dividend for the year ended December 31, 2023.
The Acquisition is expected to close during the second half of 2024, subject to shareholder approvals and other customary closing conditions, including Spirent Shareholder approval and certain regulatory closing approvals.
The Spirent Directors who hold shares of Spirent have signed irrevocable agreements in support of the Acquisition.
Why VIAVI intend to Acquire Spirent?
With VIAVI believes that building on the combined expertise of the engineering, research and development and design teams of both VIAVI and Spirent will result in greater engineering, research and development and design capabilities to accelerate new technology development and product innovation, in particular with regard to artificial intelligence and machine learning, security, cloud-native architecture and automation.
Further, the combined group will benefit from additional financial and operational resources to continue its leadership in research and development and to deliver products to new verticals to help customers solve their most difficult challenges.
Why Spirent Product Portfolio Attracts VIAVI
Spirent provides products, services and managed solutions that address the test, assurance and automation challenges of technologies, including 5G, software-defined wide area networks (“SD-WAN”), cloud and autonomous vehicles. Spirent’s international positioning, navigation and timing business also addresses the needs of customers in research and development, verification and integration testing, including the testing of hybrid positioning and sensor fusion under real-world conditions. Spirent’s strategy is built on three pillars—customer-centricity, innovation for growth and operational excellence. Spirent is executing on this strategy to further develop its offerings into live networks, increasing its recurring revenue streams and providing value-added services and solutions across the product portfolio.
Key Comments on VIAVI Acquiring Spirent
“The Spirent Board intends to unanimously recommend this all-cash offer, which not only represents an attractive outcome for Spirent Shareholders, but also provides a significant opportunity for employees, customers and other stakeholders through what is a highly strategic and highly complementary combination,” said Sir Bill Thomas, Chairman of Spirent. “With its strong management team, global scale and the cultural alignment between our businesses, we are confident that in VIAVI, we have found the right owner to take Spirent on to the next phase of its growth story.”
“Combining with VIAVI brings together a highly complementary product offering which 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 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.”
How VIAVI Aims to Fund the SPIRENT Acquisition
The Acquisition will be funded by VIAVI’s existing cash, a fully committed $800 million 7-year term loan from Wells Fargo Bank, N.A. and a $400 million investment from Silver Lake in the form of a fully committed senior convertible note. In connection with the Silver Lake investment, Ken Hao, Chairman and Managing Partner of Silver Lake will join the VIAVI Board of Directors. In addition, VIAVI obtained a $100 million 5-year revolving credit facility (unfunded at close), committed by Wells Fargo Bank, N.A., to provide additional financial flexibility.
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