Viavi to acquire Spirent Communications for $1.28bn

BY Richard Summerfield

US technology specialist Viavi Solutions has agreed to acquire the UK telecoms testing group Spirent Communications for $1.28bn.

Under the terms of the deal, Spirent shareholders will receive175 pence per share, which includes a special dividend of 2.5 pence per Spirent share in place of any final dividend for the year ended 31 December 2023. The price represents a premium of about 61.4 percent to Spirent’s closing price on 4 March, the last day of trading before the deal was announced.

The deal is expected to close during the second half of 2024, subject to shareholder approvals and other customary closing conditions, including Spirent shareholder approval and certain regulatory closing approvals. Those Spirent directors who hold shares in the company have signed irrevocable agreements in support of the deal.

The transaction will be funded by Viavi’s existing cash, an $800m loan from Wells Fargo and a $400m investment in Viavi by US private equity group Silver Lake. The acquisition will boost Viavi’s artificial intelligence, 5G and cloud-native innovation. According to a statement announcing the deal, operational efficiencies are anticipated to result in annual run-rate cost synergies of up to $75m two years after completion of the transaction.

“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,” said Sir Bill Thomas, chairman of Spirent. “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.”

“Combining with VIAVI brings together a highly complementary product offering which can be marketed globally,” said Eric Updyke, chief executive of Spirent. “It will enable Spirent to build on the strategic progress we have made to date, with a partner that has the scale and resources to capitalize on the long-term growth opportunities ahead. The combination of VIAVI and Spirent creates a stronger business that will be better able to compete, and we are confident in the opportunities this will bring for our stakeholders.”

“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,” said Oleg Khaykin, president and chief executive of VIAVI. “Further, we are uniting two teams with a shared passion for developing compelling and cutting-edge offerings for customers and a commitment to technological excellence. We are pleased to welcome a strategic, long-term investment from Silver Lake in connection with the Acquisition. Silver Lake has an outstanding track record of supporting leading technology companies through both organic growth investments and scale acquisitions.”

News: US-based Viavi to buy UK's Spirent Communications for $1.28 bln

IGT and Everi combine in $6.2bn gaming deal

BY Fraser Tennant

In a combination that creates a global gaming and FinTech enterprise, International Game Technology (IGT) and Everi Holdings Inc. are to merge in a deal that values the combined businesses at approximately $6.2bn.

Under the terms of the agreement, the transaction will be executed through a series of steps pursuant to which IGT will spin off a subsidiary owning its Global Gaming and PlayDigital businesses to IGT shareholders.

That entity will then combine with Everi, with IGT shareholders receiving shares of Everi common stock and Everi continuing as the parent company. IGT shareholders will receive approximately 103.4 million Everi shares, resulting in an approximate 54 percent ownership interest in the combined company, with existing Everi stockholders owning the balance.

Following the closing of the transaction, Everi will change its name to International Game Technology, Inc. and will trade on the New York Stock Exchange under the ticker IGT.

“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” said Vince Sadusky, chief executive of IGT. “The combination results in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting and FinTech.”

The transaction has been approved unanimously by all voting members of the IGT board of directors and the Everi board of directors. 

“We expect the combined company will deliver a comprehensive range of products and services that will engage gaming patrons and drive efficiencies and revenues to our customers,” said Michael Rumbolz, executive chairman of Everi.

Subject to receipt of regulatory approvals, the approval of Everi stockholders and IGT shareholders, and satisfaction of other customary closing conditions, the transaction is expected to close in late 2024 or early 2025.

Mr Sadusky concluded: “The creation of separate gaming and lottery companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.“

News: International Game Technology to split lottery business from gaming unit

MedTech provider Agiliti goes private in $2.5n deal

BY Fraser Tennant

In a deal that takes the US MedTech provider private, Agiliti Inc. is to be acquired by its majority owner, private equity firm THL Partners, for approximately $2.5bn.  

Under the terms of the definitive agreement, THL will acquire all outstanding shares of Agiliti common stock not currently owned by THL and its affiliates and certain management shareholders for $10 per share in cash.

Upon completion of the transaction, Agiliti will become a private company and will no longer be publicly listed or traded on the New York Stock Exchange.

“Agiliti serves a critical role in sustaining our national healthcare infrastructure, and our dedicated team has led the way to our substantial growth and evolution over the last decade,” said Tom Leonard, chief executive of Agiliti. “We are pleased to expand our five-year partnership with THL in a transaction that provides immediate value and liquidity to our shareholders, while lifting certain overhangs that had limited our performance in the public market since the time of our initial public offering.”

An essential service provider to the US healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system, Agiliti serves more than 10,000 national, regional and local acute care and alternate site providers across the US.

For more than eight decades, Agiliti has delivered medical equipment management and service solutions that help healthcare providers reduce costs, increase operating efficiencies and support optimal patient outcomes.

Acting upon the unanimous recommendation of a special committee of the Agiliti board of directors, the Agiliti board of directors approved the transaction. The transaction has also been approved by THL Agiliti LLC in its capacity as the majority shareholder of Agiliti and no other shareholder approval is required.

Serving as exclusive financial adviser to the special committee is Centerview Partners, with Weil, Gotshal & Manges acting as legal counsel. Goldman Sachs & Co. is providing exclusive financial advisory services to THL, with legal counsel from Ropes & Gray.

The transaction is expected to close in the first half of 2024, subject to customary closing conditions.

News: Healthcare tech Agiliti to be taken private in $2.5 bln deal

KKR to take Broadcom’s end-user computing division private in $4bn deal

BY Richard Summerfield

Private equity giant KKR has agreed to acquire chipmaker Broadcom’s end-user computing (EUC) unit in a deal worth around $4bn.

Upon completion of the deal, the EUC division will become a standalone company, with greater access to growth capital and a dedicated strategic focus on empowering customers and partners worldwide with innovative digital workspace solutions. The unit will continue to be run by its existing management team led by its existing senior vice president and general manager Shankar Iyer. KKR is making its investment primarily through its North America Fund XIII.

“We are confident that this pending transaction marks an exciting next chapter for the EUC Division and one that will create enormous opportunities and benefits for our customers, partners and employees,” said Mr Iyer. “The KKR team knows our industry well and is the ideal strategic partner to help us become a standalone company with an exclusive focus on delivering powerful tools for the digital workspace.”

Originally a division of VMware prior to Broadcom’s $61bn acquisition of the company in 2023, the EUC division provides a leading suite of digital workspace solutions that allow organisations to securely deliver and manage applications, desktops and data across any device or platform. Its flagship products include Horizon, a leading desktop and application virtualisation platform, and Workspace ONE, a marquee unified endpoint management platform. Broadcom announced its intention to divest its EUC unit in December 2023.

“Workspace ONE and Horizon are best-in-class platforms chosen by many of the world’s leading enterprises to create seamless and secure digital workspaces with interoperability across increasingly complicated technology stacks,” said Bradley Brown, managing director at KKR. “We see great potential to grow the EUC Division by empowering this talented team and investing in product innovation, delivering excellence for customers and building strategic partnerships.”

“EUC is a leader within large, high growth categories and demand for the business’s marquee offerings continues to grow as the workplace and the needs at the front-line evolve rapidly,” said John Park, a partner at KKR. “We are excited to deploy our experience and toolkit at KKR to back a world-class company in its next chapter as a standalone business, with accelerated investment and a continued focus on product and customer-centricity.”

Notably, KKR has announced its intention to implement an employee ownership programme, giving employees a chance to own equity in the new company alongside KKR. The deal is expected to close some time later this year, subject to standard regulatory approval.

News: Chipmaker Broadcom sells remote-access unit to KKR in $4 billion deal

CenterPoint to sell natural gas assets in $1.2bn deal

BY Richard Summerfield

Bernhard Capital Partners has announced it is to acquire CenterPoint Energy’s Louisiana and Mississippi natural gas assets for $1.2bn.

Under the terms of the deal, Bernhard Capital’s portfolio company Delta Utilities will acquire CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution businesses which include around 12,000 miles of main pipeline in Louisiana and Mississippi serving approximately 380,000 metered customers. The assets represent less than 4 percent of CenterPoint’s overall rate base.

According to a statement announcing the deal, the sales price of $1.2bn represents approximately 32 multiples of the assets’ 2023 earnings. The transaction is anticipated to close toward the end of first quarter of 2025, subject to customary closing conditions, including antitrust clearance and state regulatory approvals.

“The transaction will allow us to optimize our portfolio of utility operations and efficiently recycle approximately $1 billion in after-tax cash proceeds into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity,” said Jason Wells, president and chief executive of CenterPoint. “The sale will also enable us to redeploy approximately $1 billion of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.

“This will mark the fourth time over the past few years in which we have recycled sales proceeds and reinvested them in our regulated businesses for the benefit of all stakeholders,” he continued. “The transaction, along with the reinvested capital, will not change our targeted non-GAAP EPS growth rate of 8% in 2024, and the mid-to-high end of 6%-8% annually from 2025 through 2030. The efficiency of this transaction and portfolio optimization will further enhance our ability to continue executing our industry-leading long-term growth strategy for years to come.”

“This transaction will bring together deep expertise and leadership with many years of experience in utility operations and the invaluable institutional knowledge of those who have operated these systems for decades to benefit customers,” said Jeff Jenkins, founder and partner at Bernhard Capital Partners. “It builds upon our recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, establishing stronger, more resilient communities across the Gulf South. Once both transactions are complete, Delta Utilities will be a leading natural gas utility in Louisiana and Mississippi and among the top 40 providers in the United States.”

News: CenterPoint to sell Louisiana and Mississippi natgas assets for $1.2 bln