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Spirent, the telecommunications equipment testing company, confirmed on Thursday that it would sell its network products division to Doughty Hanson, the private equity group, for about £288.9m.
The agreement to sell HellermannTyton was first announced in September, although the price is higher than predicted at the time. Doughty Hanson will pay £277.7m in cash and take on about £11.2m in debt.
By late morning, Spirent shares had risen almost 8 per cent to 54.5p.
The network products division has been a cash cow for Spirent and helped the company survive the downturn in the telecommunications industry in the first few years of the decade.
“This strengthens our overall financial position and realises significant value, which will enable us to execute our strategy to invest in and grow our communications activities,” said Anders Gustafsson, chief executive. “We continue to believe that the telecoms test and monitoring market offers good medium term growth prospects.”
He added that Spirent intended to use the proceeds to buy back up to £50m worth of shares, to pay down debt and to pay off the £47m deficit in the company’s final salary pension scheme.
The disposal will dilute earnings in the short term but the company said it would strengthen its overall financial position.
Spirent added that current trading was in line with expectations.
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