IT communications company Viavi Solutions plans to acquire telecommunications testing company Spirent Communications for £1.005 billion ($1.27bn).

The acquisition will be funded by a mixture of Viavi's existing cash, a fully committed $800m seven-year term loan from Wells Fargo Bank, and a $400m investment in Viavi from Silver Lake.

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– Viavi Solutions

“The Spirent Board intends to unanimously recommend this all-cash offer, which not only represents an attractive outcome for Spirent Shareholders but also provides a significant opportunity for employees, customers and other stakeholders through what is a highly strategic and highly complementary combination,” Sir Bill Thomas, chairman of Spirent, sad.

“With its strong management team, global scale and the cultural alignment between our businesses, we are confident that in Viavi, we have found the right owner to take Spirent on to the next phase of its growth story.”

Oleg Khaykin, president and CEO of Viavi, added: “Combining our leading communications test and measurement and optical technologies and Spirent’s high-performance testing and assurance solutions is expected to deliver enhanced product solutions and applications, accelerate growth in new markets and strengthen innovation through expanded engineering and design capabilities."

The acquisition is expected to close during the second half of 2024, subject to shareholder approvals and other customary closing conditions.

For fiscal year 2023, Viavi brought in $1.1 billion in revenue, down 14 percent year over year. The company said that operational efficiencies from the acquisition are anticipated to result in annual run-rate cost synergies of up to $75 million around two years after the completion of the acquisition.