UK telecoms specialist Spirent agrees to £1bn takeover offer from US rival
Deal would remove another UK-listed business from London market
US technology specialist Viavi Solutions has made a £1bn takeover offer for telecoms testing group Spirent Communications, in a deal that would remove another UK-listed business from the London market.
The US company on Tuesday offered 175 pence per share for Spirent, a 61 per cent premium to the closing price on Monday.
Oleg Khaykin, chief executive of Viavi, said the deal would “deliver enhanced product solutions and applications, accelerate growth in new markets and strengthen innovation through expanded engineering and design capabilities”.
If the deal goes ahead, Spirent would be the latest company to delist from London. Flutter, the gambling group that owns Paddy Power, said in January that it was planning to move its primary listing to New York, while shareholders in Tui, Europe’s largest travel company, last month overwhelmingly approved its proposal to ditch its London listing.
Other companies including miner BHP, building materials group CRH, packaging business Smurfit Kappa and plumbing supplier Ferguson have already left.
Nasdaq-listed Viavi provides network testing and monitoring to industries including telecommunications, the military and aerospace. Spirent also tests 5G and WiFi networks, “internet of things” devices and cloud computing networks.
The deal will be funded by the US group’s existing cash, a $800mn loan from Wells Fargo and a $400mn investment in Viavi by US private equity group Silver Lake.
Khaykin said Silver Lake had an “outstanding track record” of supporting technology companies through organic growth investments and acquisitions. Ken Hao, Silver Lake chair and a managing partner, will join Viavi’s board as part of the investment.
Sir Bill Thomas, chair of Spirent, said its board intended to unanimously recommend the offer.
Spirent shareholders will receive 172.5p per share in cash and a special dividend of 2.5p per share in lieu of a final dividend.
Spirent chief executive Eric Updyke said the company had “endured significant challenges due to the macro backdrop” and that these conditions were “likely to continue for some time”. He added the deal brought “together a highly complementary product offering, which can be marketed globally”.
The FTSE 250 company on Tuesday also reported an 80 per cent drop in reported profit before tax to $22.9mn in 2023. It said inflation and higher interest rates had hit customer demand.
Viavi added it expected operational efficiencies from the deal, which is anticipated to close in the second half of the year, subject to shareholder approval and other conditions.