LONDON, UK: Spirent Communications, a leading provider of test and measurement solutions for the communications industry, has agreed to be acquired by Viavi Solutions. The deal, which values Spirent at about £1.005 billion, will be implemented through a scheme of arrangement under UK law.

Spirent shareholders will receive 175p per share in cash, comprising 172.5p as the acquisition price and 2.5p as a special dividend. This represents a 61.4% premium to Spirent’s closing price on 4 March 2024, the last trading day before the announcement.

The boards of Viavi Solutions and Spirent said they are pleased with the terms of the acquisition, which they believe will create a stronger and more diversified company in the network testing and assurance market.

In addition, Silver Lake is making a US$400 million long-term strategic investment in Viavi in connection with the acquisition.

The Viavi Group is a global leader in communications test and measurement and optical technologies.

Viavi has been following the Spirent Group for a number of years and has been impressed with the strategy employed by the Spirent Board and its management team in creating a well-balanced and diversified business with a global presence. Viavi views the Spirent Group as a provider of complementary products and services that address the test, assurance, and automation challenges of a new generation of technologies.

Based on discussions with Spirent’s senior management team, Viavi and Bidco believe there is a high degree of alignment between the Viavi Group’s and the Spirent Group’s internal cultural identities and a shared understanding of how people work together to execute the business strategies. Viavi intends to continue its strategy to empower employees to learn and develop their skills to accelerate their career and to attract best-in-class talent.

Viavi believes there is a compelling strategic and financial rationale for the Acquisition to create a leading provider in test, measurement and assurance solutions better able to serve customer needs. Spirent’s product offerings and technological assets are highly complementary and synergistic to Viavi’s existing portfolio, which will enable the Combined Group to deliver high-performance, integrated solutions for networking and mission critical applications, including 5G & 6G wireless infrastructure.

Viavi believes that it can better serve its customers by combining its product offerings with Spirent’s complementary product portfolio. Viavi also believes that Spirent’s existing business would benefit from the opportunity to market a broader product offering and range of services to existing and new customers.

By combining the Viavi Group and the Spirent Group, the Combined Group will be able to drive ongoing successful product development and create both immediate and sustainable strategic value.

Eric Updyke, Chief Executive Officer of Spirent Communications, said: “Spirent has undergone a period of significant transformation and growth over recent years and I am proud of the significant progress we have made, thanks to the efforts and commitment of our people. We have evolved our offering and routes to market to focus more on high-quality, high-growth, software-centric solutions and have become a mission critical partner to our customers in a more complex and digitised world.

More recently, however, we have endured significant challenges due to the macro backdrop and the impact of this on our core end markets. These conditions are likely to continue for some time.

Combining with the Viavi Group brings together a highly complementary product offering which can be marketed globally. 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 capitalise on the long-term growth opportunities ahead. The combination of the Viavi Group and the Spirent Group creates a stronger business that will be better able to compete in what remains a challenging market environment and we are confident in the opportunities this will bring for many of our stakeholders.”

Commenting on the Acquisition, Oleg Khaykin, President and CEO of Viavi, said: “Viavi is proud to help enable its global customers to pursue innovation across the wide range of industries it serves. 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 confident that the highly complementary nature of this transaction will position us to capitalise on opportunities ahead to drive increased revenue growth and long-term value creation for all stakeholders.

We are pleased to welcome a strategic, long-term investment from Silver Lake in connection with this Acquisition. Silver Lake has an outstanding track record of supporting leading technology companies through both organic growth investments and scale acquisitions.”