Viavi to Buy Spirent

There was a significant bit of consolidation among testing and assurance vendors yesterday. Viavi Solutions has agreed to acquire Spirent in an all cash deal. Both companies focus on testing and assurance products and services, enabling network operators around the world to better manage their infrastructure and serve customers.

The product sets and customer bases have some direct overlap, but in general are pretty complementary. That does mean the integration will probably be somewhat complicated, but Viavi plans to squeeze out $75M in run-rate synergies as it integrates the two companies over the next two years. Viavi plans to use free cash flow generated during that period to pay down debt as well.

Viavi will be spending 172.5 pence per share, which values the transaction at £1.005B, or US$1.277B. Spirent shareholders will also get a 2.5 pence per share dividend as part of the process. As part of the deal, Silver Lake will invest $400M in Viavi, with their Chairman and Managing Partner Ken Hao joining the company’s board. Wells Fargo is helping out with an $800M term loan and a $100M 5-year revolving credit facility.

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Categories: Mergers and Acquisitions · Software · Telecom Equipment