Spirent Communications PLC (LON:SPT) announced it has acquired octoScope, Inc from founder Fanny Mlinarsky and other investors for up to US$73mln (£52mln).
The provider of test, assurance, and analytics solutions will pay an initial US$55mln (£39mln), funded from existing cash resources, with extra consideration capped at US$18mln (£13mln) based on annual revenue growth targets for 2021 and 2022 and retention of key staff.
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Founded in 2006 in the US, octoScope uses patented technology to provide automated Wi-Fi and 5G testing in emulated real-world environments, including the latest Wi-Fi 6 and 6E technologies.
Its products are used by a blue-chip roster of communication service providers, chipset, device, network infrastructure and Wi-Fi equipment vendors, including Google, Facebook, Verizon, Qualcomm, Nokia, Amazon, Philips and Sony.
As of December 2019, it had gross assets of US$11mln, having delivered revenue of US$17mln and profit before tax of US$4mln during the year.
Revenue came in at around US$20mln in 2020.
Spirent said this acquisition is complementary and in line with its targeted investment plans announced in October.
It added that it will become “the Wi-Fi test leader” while extending capabilities for 5G solutions.
"WiFi testing is a fast growing area due to transitions in technologies as well as the continued expansion of the market," analysts at Liberum commented.
"We, therefore, regard the acquisition as clearly positive, and is in-line with the company's stated capital allocation strategy with a focus on M&A. Further deals are expected. Spirent announces full-year results on March 11 and we expect the company to confirm continuing strong momentum in the business."
Shares jumped 7% to 244p early on Friday.
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