Viavi Solutions Inc. (Viavi) recently closed the acquisition of Spirent Communications plc’s high-speed ethernet, network security, and channel emulation testing business for an all-cash consideration of $425 million. This move is expected to bolster Viavi’s network service enablement ("NSE") revenue by approximately $180 million within the first 12 months post-closing. Additionally, Viavi anticipates the acquisition to be accretive to non-GAAP EPS 12 months after closing, with the company planning to utilize its U.S. net operating losses to lower the blended non-GAAP tax rate of the combined group.
In conjunction with the acquisition, Viavi entered into a term loan credit agreement with Wells Fargo Bank, National Association, and other lenders for a senior secured term loan of $600 million, borrowed in full at closing and maturing seven years from closing. The proceeds from this credit agreement will be used to finance a portion of the acquisition and related expenses, as well as for general corporate purposes.
These strategic moves are part of Viavi's efforts to expand its offerings and synergistic product portfolio across ethernet, application performance, security, AI, and digital infrastructure verticals. This acquisition is expected to enhance Viavi's capabilities in offering new solutions in high-speed ethernet, network security, and channel emulation testing, further solidifying its position as a global provider of network test, monitoring, and assurance solutions for various sectors including telecommunications, cloud, enterprises, first responders, military, aerospace, and railway. Following these announcements, the company's shares moved 1.8%, and are now trading at a price of $13.01. If you want to know more, read the company's complete 8-K report here.
