Keysight’s Spirent acquisition: offers, review and testing businesses
Keysight’s Spirent offer led to a prolonged review and a split of testing businesses. Dated results and later positioning work trace the transaction and its scope.
Keysight Technologies agreed on 28 March 2024 to acquire Spirent Communications in an all-cash transaction valued at approximately £1.16 billion, or $1.46 billion. The US test and measurement company secured the backing of the British business, which withdrew its support for VIAVI Solutions’ competing £1.01 billion proposal. The announcement-day currency reference was $1 to £0.7922.
Keysight offered 199 pence in cash per Spirent share. Shareholders were also entitled to a 2.5-pence special dividend instead of a final dividend for 2023. The offer required shareholder and regulatory approvals. Keysight expected access to new serviceable market opportunities worth up to $1.5 billion and anticipated higher gross and operating margins after integration; these were the buyer’s expectations.
The earlier VIAVI proposal
VIAVI had announced its recommended cash offer on 5 March 2024. Its more precise valuation was approximately £1.005 billion, equivalent to $1.277 billion at the exchange rate used on 4 March. The proposed shareholder payment comprised 172.5 pence in cash and a separate 2.5-pence special dividend. VIAVI then expected completion in the second half of 2024, subject to shareholder votes, regulatory approvals and other conditions. Its planned combination covered testing, assurance and security for research laboratories, service providers, data centres and critical infrastructure.
The proposed funding package combined VIAVI’s existing cash, an $800 million seven-year term loan and a $400 million senior convertible note investment from Silver Lake. VIAVI also obtained a commitment for a $100 million five-year revolving facility, intended to remain undrawn at closing. It anticipated annual cost savings of up to $75 million roughly two years after completion. The company identified cloud service providers, enterprise networks, private 5G networks and positioning applications as prospective markets. Spirent’s positioning work covered research, verification and integration testing, including hybrid positioning and sensor fusion under real-world conditions. These financing and integration plans belonged to VIAVI’s original whole-company proposal.
Shareholder approval and the first divestment process
Spirent shareholders approved the resolutions supporting Keysight’s acquisition at the court and general meetings on 22 May 2024. The scheme document had been published on 25 April. The transaction used a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006, covering Spirent’s issued and future ordinary share capital. By 2 December, Keysight had begun a competitive auction for Spirent’s high-speed Ethernet and network security businesses, aiming to sell them alongside completion of the wider acquisition. It filed for approval with China’s State Administration for Market Regulation on 25 November. The French economy ministry had granted conditional authorisation, while the German economy ministry and the UK’s Chancellor of the Duchy of Lancaster had approved their respective reviews. Keysight still expected completion during the first half of its fiscal 2025, ending 30 April 2025. That remained a forecast dependent on outstanding conditions.
Spirent’s business during the review
Spirent entered 2025 with signs of improved ordering after a difficult telecommunications market. In its 17 January trading update, the company estimated 2024 revenue at about $460 million, against approximately $474 million in 2023. Revenue grew 5% in both the fourth quarter and the second half compared with the corresponding prior-year periods. Stronger second-half orders brought full-year orders close to their 2023 level. Growth in North America and Europe, the Middle East and Africa offset weaker activity in China. Spirent planned greater attention to customers in Japan and India, while continuing investment in its product roadmaps. It expected adjusted operating profit to be similar to 2023. Its preliminary financial figures remained subject to external audit. The company also identified early growth from AI-oriented high-speed Ethernet products and additional financial-services customers for assurance products.
Spirent’s final 2024 results, released on 4 March 2025, recorded revenue of $460.2 million, down from $474.3 million. Lifecycle Service Assurance contributed $181 million, against $199.1 million, while Networks & Security increased to $279.2 million from $275.2 million. Adjusted operating profit rose to $46.2 million from $45.2 million, but reported operating profit fell to $10.3 million from $18.4 million. The adjusted measure excluded acquired intangible amortisation, share-based payments and other adjusting items, totalling $35.9 million in 2024. Professional advisory charges associated with the Keysight transaction accounted for $18.2 million. Product development spending was $99 million, compared with $102.4 million. The year-end orderbook reached $312.1 million, against $293.7 million, and closing cash increased to $141.8 million from $108.1 million. Operating cash flow was $57 million, compared with $45.8 million in 2023. Spirent ended the year without bank debt. These results described Spirent before completion of the acquisition.
For the six months ended 30 June 2025, Spirent increased revenue to $208.1 million from $197.3 million. Order intake rose to $206.5 million from $188.8 million, and the orderbook reached $310.1 million compared with $284.2 million a year earlier. Adjusted operating profit was $7.5 million, against $5 million; the reported operating loss widened to $14.2 million from $9.3 million. Adjusting items totalled $21.7 million, including $10.4 million of acquisition-related costs. Closing cash was $157.3 million, compared with $131 million. Networks & Security revenue increased to $124.4 million from $111.6 million, while Lifecycle Service Assurance declined to $83.7 million from $85.7 million. Spirent attributed the former division’s growth to positioning and high-speed Ethernet demand. It also described continuing delays and geographical differences in operators’ moves to 5G Standalone, rather than a uniform recovery across its telecommunications customers. Product development investment increased to $50.1 million from $47.4 million. New offerings included the Landslide E20 over-the-air system, cloud-native benchmarking and robotic optical switches for network testing.
Positioning technology within the portfolio
Spirent introduced its PNT X simulation system in 2024 for positioning, navigation and timing testing. The platform combined several signal sources, including L-band, S-band and alternative navigation signals, rather than relying exclusively on conventional satellite navigation inputs. Multiple sources could run simultaneously, providing real-time feedback during testing. Its published capabilities included a standard 2 kHz update rate for hardware-in-the-loop and high-dynamics vehicle applications, alongside interfaces for testing controlled reception pattern antennas. Spirent presented deterministic testing across the development cycle and a smaller laboratory footprint as intended customer benefits. The platform also incorporated the company’s patented I/Q spatial-awareness capability. Spirent’s GPS signal-generator business was nearly four decades old at the launch. PNT X extended its positioning simulation range for developers evaluating how connected and autonomous systems obtain location and timing information.
The UK competition decision
The Competition and Markets Authority opened its merger inquiry on 16 January 2025. On 13 March it decided against a phase-two investigation using the de minimis exception; the full decision followed on 16 May. The CMA’s assessment identified a realistic prospect of substantially reduced competition in five global testing markets:
- Channel emulation.
- Mobile core.
- Satellite navigation.
- High-speed Ethernet.
- Network security.
The authority considered the relevant markets’ combined UK value to be below £30 million and exercised its discretion against further investigation. Its decision distinguished that limited domestic market size from its competition findings. In satellite-navigation testing, it identified a loss of future competition between Keysight’s expansion plans and Spirent’s established position. In the other four markets, it expected the combined company to become the clear market leader without sufficient competitive constraints.
VIAVI returns as a buyer of business lines
On 3 March 2025, VIAVI announced a definitive agreement to acquire Spirent’s high-speed Ethernet and network security businesses from Keysight. The proposed payment comprised $410 million in base cash consideration and another $15 million in contingent consideration payable at closing, subject to customary adjustments and conditions. Regulatory approval and completion of Keysight’s Spirent acquisition were prerequisites. VIAVI expected its purchase to close in the second quarter of calendar 2025, shortly after the wider transaction. At that stage, the announced asset package covered two business lines.
VIAVI expected those businesses to add approximately $180 million of Network Service Enablement revenue in the first twelve months following completion and to become accretive to earnings per share after twelve months. It described the product combination as extending its Ethernet testing capabilities and software, hardware and protocol expertise across network layers. Wells Fargo committed a $425 million Term Loan B to finance the transaction. VIAVI could seek additional borrowing for general corporate purposes on a best-efforts basis, subject to market conditions.
The US divestiture requirement
The US Department of Justice announced a proposed settlement on 2 June 2025 covering three Spirent businesses: high-speed Ethernet testing, network security testing and radio-frequency channel emulation. It filed a civil antitrust complaint and the proposed settlement simultaneously in the federal district court in Washington, DC. The department alleged that Keysight and Spirent together accounted for 85% of the US high-speed Ethernet testing market, more than 60% of network security testing and more than 50% of RF channel emulators.
The DOJ characterised the companies as close competitors and warned of higher prices, lower quality and reduced innovation without divestitures. These were its competition allegations and prospective assessment. The proposed remedy required the three businesses to go to VIAVI with the tangible and intangible assets necessary to make and sell their products. The lines represented about 40% of Spirent revenue, and VIAVI was expected to hire key supporting employees.
Revised completion expectations
By 24 July 2025, Keysight identified SAMR clearance as the final outstanding regulatory approval. The buyer and Spirent were continuing discussions with the authority. Keysight then expected the scheme to take effect by 29 September, the transaction’s long-stop date. Court sanction and any other remaining scheme conditions still applied. The revised timetable replaced the earlier expectation of completion in the first half of Keysight’s fiscal 2025; it did not itself announce approval or completion.
The timetable changed again in September. Keysight and Spirent agreed on 9 September to move the long-stop date from 29 September to 27 October, with Takeover Panel consent and subject to court approval. Their 15 September announcement said they had not yet received SAMR’s decision on conditional clearance. A hearing scheduled for 16 September would instead consider the application to extend the deadline. Keysight believed the regulatory review was in its final stages and expected a decision shortly, but the announcement kept that expectation separate from an actual clearance. The parties said they would confirm the hearing’s outcome in a further announcement. Completion remained conditional on the scheme requirements, including court sanction, rather than becoming automatic when a new deadline was proposed. Freshfields acted as Keysight’s legal adviser and Wilmer, Cutler, Pickering, Hale and Dorr as its regulatory adviser. Linklaters advised Spirent.
Completion and the resulting business split
Keysight completed the acquisition on 15 October 2025 for approximately £1.16 billion, or $1.46 billion, on a fully diluted basis. Shareholders’ total entitlement was 202.5 pence per share: 199 pence in cash plus 3.5 pence of special dividends already paid. Spirent’s operations and financial results would be incorporated into Keysight’s Communications Solutions Group. Keysight highlighted satellite emulation, positioning and network automation among the acquired capabilities. All regulatory conditions were met, including the DOJ, CMA, French, German and SAMR reviews. Delisting of Spirent shares was scheduled for 17 October. The disposal of high-speed Ethernet, network security and channel emulation was still expected the following day when Keysight announced completion.
VIAVI completed that separate purchase on 16 October 2025 for $425 million in cash, subject to customary closing adjustments. Its final package included channel emulation alongside high-speed Ethernet and network security. VIAVI continued to forecast approximately $180 million in Network Service Enablement revenue during the first twelve months and accretion to non-GAAP earnings per share after twelve months. Concurrently, it entered a seven-year senior secured term loan agreement and borrowed the full $600 million available. The financing covered part of the acquisition, related expenses and general corporate purposes; the loan amount was separate from the purchase price. Qatalyst Partners advised VIAVI financially, Fried Frank advised on the acquisition, and Gibson Dunn advised on the credit facility. The revenue and earnings expectations remained forecasts at closing.
A later positioning initiative
By February 2026, Spirent was working as part of Keysight on a positioning resilience initiative with the European Space Agency. The three-year project, announced through a Spirent-supplied release, was supported by Element 2 of ESA’s Navigation Innovation and Support Program. It planned a framework for assessing and rating positioning, navigation and timing equipment and services used in UK critical infrastructure. The proposed components were a Spirent PNT Alliance, a shopfront for relevant solutions and a PNT Resiliency Health Check. The alliance would include the Royal Institute of Navigation, commercial participants, researchers and professional or government bodies. Annual assessments were intended to help organisations identify dependencies and vulnerabilities, establish benchmarks and track improvements. The shopfront was intended to showcase available resilience solutions, while the health check would independently appraise equipment against general performance, resilience and security criteria. Finance, energy and telecommunications operators were identified as prospective users. This was a planned assessment and commercialisation programme within the retained positioning business, rather than a published measurement of resilience gains already achieved.
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