VIAVI Solutions Comments on Offer for Spirent Communications by Keysight Technologies

Rhea-AI Summary

VIAVI Solutions notes the recommended cash acquisition of Spirent by Keysight Technologies, Inc., highlighting its business overlap with Spirent. The proposed combination may limit customer choice and entrench Keysight's leading position. VIAVI's Acquisition represents certain value in this scenario.

Insights

Market Research Analyst

The announcement of Keysight Technologies' acquisition of Spirent Communications has potential market implications that warrant a closer look. One key aspect to consider is the competitive landscape within the technology and communications sector. The acquisition could consolidate Keysight's market position, possibly leading to reduced competition. This, in turn, could affect pricing power and innovation dynamics within the industry.

From an investor's perspective, the market's reaction to such news is often mixed. While the acquiring company might see a short-term dip in stock price due to the costs associated with the acquisition, the long-term benefits could include synergies and an expanded customer base. For Spirent shareholders, the acquisition price will be a critical factor, as it will determine the immediate financial benefit of the deal.

Lastly, the regulatory scrutiny that such acquisitions attract is notable. Authorities may investigate to ensure that the acquisition does not breach antitrust laws, which could delay or even prevent the transaction. This presents a risk factor that shareholders of both companies must monitor closely.

Financial Analyst

Analyzing the financial dimensions of the proposed acquisition, the market will be keenly observing the deal valuation and the method of payment, whether it's a cash deal or involves stock considerations. The premium that Keysight is willing to pay over Spirent's current market valuation will be scrutinized to assess the acquisition's accretiveness to earnings.

Investors should also consider the impact on VIAVI's financial position, given that they are noting limited business overlap with Spirent. VIAVI's response to the acquisition may signal its own strategic positioning and potential future moves, which could include looking for other acquisition targets or strengthening its core competencies to compete more effectively.

Furthermore, VIAVI's engagement of Qatalyst Partners LP and Wells Fargo Securities, LLC as financial advisors suggests a significant commitment to the process, indicating that they may be preparing a counteroffer or other strategic responses.

Legal Expert

The legal implications of such a high-profile acquisition are multifaceted. Firstly, the regulatory approvals required for the deal to proceed are a critical step. These may include antitrust clearance and foreign investment approvals, especially if the companies operate in multiple jurisdictions. The announcement mentions restrictions for overseas shareholders, which underlines the complexity of cross-border transactions and the need for compliance with various international securities laws.

Another important aspect is the adherence to the Takeover Code, which governs the conduct of takeovers in the UK. The Scheme Document mentioned will contain important details regarding the terms of the acquisition and the rights of the shareholders. Shareholders of both companies should review these documents carefully to understand the legal ramifications of the transaction.

The legal proceedings surrounding the deal will also be closely watched by the industry for precedent-setting outcomes, particularly in terms of how regulatory bodies view market consolidation in this sector.

CHANDLER, Ariz.--(BUSINESS WIRE)-- VIAVI Solutions (“VIAVI”) (NASDAQ: VIAV) notes the announcement made by Keysight Technologies, Inc. (“Keysight”) and Spirent Communications plc (“Spirent”) on March 28, 2024, of a recommended cash acquisition of Spirent by Keysight.

VIAVI believes that its Acquisition represents certain value and notes its limited business overlap with Spirent relative to Keysight. VIAVI believes that the proposed combination of Keysight and Spirent would further entrench Keysight’s leading position in many product segments, which would limit customer choice.

Capitalized terms used but not defined in this announcement have the meanings given to them in the scheme document published by Spirent in relation to VIAVI Bidco’s proposed acquisition of Spirent on March 27, 2024 (the “Scheme Document”).

Important Notices

Qatalyst Partners LP, which is authorized by the Securities and Exchange Commission and regulated by the Financial Industry Regulatory Authority and the Securities and Exchange Commission in the United States, is acting exclusively as financial adviser to VIAVI and VIAVI Bidco and will not be responsible to anyone other than VIAVI and VIAVI Bidco for providing the protections afforded to its client, or for providing advice in relation to the matters set out in this announcement or any other matter referred to herein.

Wells Fargo Securities, LLC, a subsidiary of Wells Fargo & Company, which is authorized by the Securities and Exchange Commission and regulated by the Financial Industry Regulatory Authority and the Securities and Exchange Commission in the United States, is acting exclusively as financial adviser to VIAVI and VIAVI Bidco and will not be responsible to anyone other than VIAVI and VIAVI Bidco for providing the protections afforded to its client, or for providing advice in relation to the matters set out in this announcement.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable requirements. Further details in relation to Overseas Shareholders are contained in the Scheme Document. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

Publication on website and hard copies

This announcement and the documents required to be published pursuant to Rule 26.1 of the Code will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on VIAVI Bidco's website at https://investor.viavisolutions.com/overview/default.aspx by no later than 12.00 p.m. (London time) on the Business Day following the date of this announcement.

Neither the content of any website referred to in this announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this announcement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240328228905/en/

VIAVI Solutions



Prosek Partners (Public Relations Advisor to VIAVI Solutions and VIAVI Solutions Acquisitions Limited)

Philip Walters, Prosek Partners (UK)

+44 (0) 7773331589



Andrew Merrill, Prosek Partners (US)

+1 917 622 1252



pro-viavi@prosek.com

Source: VIAVI Solutions

FAQ

What is the significance of VIAVI's Acquisition in relation to Spirent and Keysight Technologies, Inc.?

VIAVI's Acquisition highlights business overlap with Spirent and potential limitations on customer choice due to Keysight's leading position.

Who are the financial advisers to VIAVI and VIAVI Bidco in this acquisition?

Qatalyst Partners LP and Wells Fargo Securities, are acting as financial advisers to VIAVI and VIAVI Bidco.

Where can Overseas Shareholders find more information about the Acquisition?

Overseas Shareholders can refer to the Scheme Document for further details on restrictions and compliance in their jurisdictions.

When will the documents related to the Acquisition be available for public access?

The documents will be available on VIAVI Bidco's website by no later than 12.00 p.m. (London time) on the Business Day following the date of the announcement.