Viavi Solutions Inc (NASDAQ: VIAV) shares rocketed after the company posted upbeat Q2 results and announced plans to buy Cobham AvComm and Wireless Test and Measurement businesses for $455 million in cash.
On Thursday, the San Jose-based company signed a definitive agreement to acquire the Test and Measurement business of Cobham had already been approved by the Board of Directors of each company and is expected to close during the second half of VIAVI's fiscal year 2018.
In a news release, the company said the transaction would significantly strengthen Viavi's competitive position in 5G deployment and diversifies the company into military, public safety and avionics test markets.
Cobham AvComm and Wireless T&M trumpets its status as the leader in comprehensively testing communication service providers' networks from the radio access network through to the network core.
The company has also served military, public safety and aviation markets for decades with its trusted land-mobile radio and avionics test solutions. The business generated more than $200 million of revenues in calendar year 2017.
Viavi CEO Oleg Khaykin said, "This combination is another step in our NSE strategy of driving operational scale and monetizing our NOL assets. Cobham AvComm and Wireless T&M are recognized leaders with a world-class team that has a long track record of successfully bringing innovative solutions to market.
“Together, we expect new opportunities to grow through channel expansion and technology sharing as we address rapidly emerging opportunities in 5G, software-defined and virtualized test."
Shares in Viavi climbed $1.56, or 18%, to $10.23.