Keysight makes $1.5B bid on Spirent Communications, outpacing VIAVI’s initial offer
Keysight Technologies has made a rival bid of $1.46 billion for Spirent Communications, challenging VIAVI’s earlier bid for the British-based test and measurement company.
Under the terms of Keysight’s agreement, Spirent shareholders will also be entitled to receive a special dividend of 2.5 pence per Spirent share instead of any final dividend for the year ended 31 December 2023 (together with the cash consideration of 199 pence per share, the “Offer”).
Keysight said it sees Spirent’s business as highly attractive and aligned with Keysight’s long-term software-centric solutions strategy. Additionally, Keysight sees strategic synergy between the two firms, and the two companies’ complementary products will help customers address their complex engineering challenges. By adding Spirent’s offerings to its portfolio, Keysight expects to address new serviceable available market opportunities of up to $1.5 billion.
“Spirent has a differentiated portfolio, which is a strong fit for Keysight,” said Satish Dhanasekaran, President and CEO of Keysight. “Both companies focus on empowering and accelerating high-value customer solutions. In Keysight, Spirent will join a platform of significant customer scale with the capacity to provide the necessary capital and resources to help Spirent grow and accelerate the delivery of its strategic vision.”
Spirent gives support
For its part, Spirent has withdrawn its support for Viavi’s offer, which was 15% lower than Keysight’s bid.
"Following my discussions with the Keysight management team, I am excited about the broader reach and expanded long-term prospects for Spirent arising from the combination with Keysight," said Eric Updyke, CEO of Spirent, according to a Reuters report.
Spirent said its board of directors intends to unanimously recommend the Offer, which is conditional on, among other things, the approval of most of the Spirent Shareholders at the Court Meeting and the Spirent General Meeting and regulatory approval as laid out in the Offer announcement.
Spirent has 1,500 employees and serves 1,100 customers in over 50 countries. Keysight said its acquisition proposal would lead to less than 5% headcount reductions across the combined group.
VIAVI cites competitive concerns
VIAVI Solutions isn't taking rival bid from Keysight sitting down.
Earlier this month, VIAVI announced it would acquire Spirent Communications for $1.27 billion to enhance its ability to serve a broad range of service providers, data centers, and other infrastructure opportunities.
The company said that Keysight’s bid could hurt customers by limiting their options for test and measurement needs, as one vendor controls more of the market.
“VIAVI believes that its Acquisition represents certain value and notes its limited business overlap with Spirent relative to Keysight,” the company said in a statement. “VIAVI believes that the proposed combination of Keysight and Spirent would further entrench Keysight’s leading position in many product segments, limiting customer choice.”
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Sean Buckley
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