12:42 PM EST, 03/05/2024 (MT Newswires) -- (Updates with stock price movement in the headline and second paragraph)

Viavi Solutions ( VIAV ) has agreed terms on a cash offer to acquire Spirent Communications in a deal that values Spirent, a telecommunications testing firm, at roughly 1.01 billion pounds ($1.28 billion), the companies said Tuesday.

Viavi shares were up nearly 12% in recent trading.

Under the terms, shareholders of Spirent will receive 172.5 pence per share in cash and a special dividend of 2.5 pence per share. The deal, which is expected to close in the second half of 2024, is subject to approval from regulators and stockholders.

The companies expect the deal to generate annual run-rate cost synergies of up to $75 million about two years after its completion.

Viavi plans to fund the acquisition with existing cash, a seven-year term loan of $800 million and a $400 million investment from Silver Lake through a senior convertible note. The company also obtained a $100 million, five-year revolving credit facility for additional financial flexibility.

Price: 10.91, Change: +1.18, Percent Change: +12.13