US giant acquires Spirent solutions

Click to follow
The Independent Online

Spirent, which makes kits to test telecoms networks, announced the sale of its sensing solutions division to a unit of General Electric, the US electronics giant, yesterday for $220m (£151m) in cash.

The sale, which is expected to be completed by the end of November, is part of Spirent's drive to focus purely on its telecoms test and network monitoring businesses.

Spirent said it planned to spend the bulk of the cash raised from the sale on reducing its £347m of debt as well as on "general corporate purposes". Shares in the company closed down 0.5p at 115.5p.

Nicholas Brookes, the chief executive, said: "The divestment of our sensing solutions business is the next step in our strategy to focus on communications activities to serve the long-term growth in the telecommunications industry."

Under the terms of the deal, all of that division's 2,000 staff will be transferred. The transaction is, however, still subject to certain regulatory approvals.

The sensing solutions division's products, which sense temperature, humidity and pressure, are sold to the automotive, medical and pharmaceutical sectors. In 2000, the division recorded an operating profit of £11.3m on sales of £90.7m.

The move follows Spirent's shock alert last month when it warned it expected trading to deteriorate as it axed 500 jobs and said non-core divisions were up for sale. Spirent's systems business, which sells software to the aviation industry, is also thought to be considered "non-core".

In the six months ended 30 June, Spirent recorded a pre-tax loss of £242.8m. In the previous year, the company recorded a profit of £32.7m.

Comments