A tech firm listed on the London Stock Exchange for more than 30 years is to be taken over by an American company after a £1 billion deal was agreed.
Subject to shareholder approval, Spirent Communications plc will be acquired by US communications equipment firm Viavi, which is based in Arizona and listed on New York’s Nasdaq exchange.
Spirent provides products, services and managed solutions that address the test, assurance and automation challenges of technologies including 5G, software-defined wide area networks, cloud and autonomous vehicles.
Headquartered in Crawley, Sussex, the firm employs more than 1,500 people across 11 global offices and serves approximately 1,100 customers in over 50 countries.
The announcement was made to the LSE alongside an annual financial report from Spirent which showed an 80% drop in pre-tax profits to around £18 million – down from £90.4m in 2022 – and revenues of £374m compared with £479m in the prior year.
As part of the acquisition, Viavi has been backed with $400m long-term strategic investment from US private equity firm Silver Lake.
The offer of 172.5 pence per share – and a special dividend of 2.5p in lieu of any final dividend for the year ended 31st December 2023 – values Spirent at more than £1bn and represents a premium of 61.4% to Monday’s closing price of 108.4p.
Spirent shares were valued at 300p as recently as 2021.
“Spirent is a business with a differentiated value proposition, diversified portfolio of technology solutions, deep customer relationships and talented people,” said chairman Sir Bill Thomas. Despite these strengths, we recognise that the Spirent Group has been operating against an increasingly challenging market backdrop.
“Having considered in great detail the interests of all Spirent shareholders and Spirent as a whole, the Spirent board believes that this all-cash offer recognises the underlying value of Spirent. That is why we intend to unanimously recommend this cash offer, which not only represents an attractive outcome for our investors, but also provides a significant opportunity for employees, customers and other stakeholders through what is a highly strategic and highly complementary combination.
“With its strong management team, global scale and the cultural alignment between our businesses we are confident that in the Viavi Group we have found the right owner to take Spirent on to the next phase of its growth story.”
CEO Eric Updyke (pictured) added: “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.
“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.”
Oleg Khaykin, president and CEO of Viavi, said: “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.”
Note: This article was changed after it incorrectly stated that the deal would take Spirent private
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