Spirent sells network products group

Spirent has agreed to sell its HellermannTyton network products division, which makes wire-fastening components for telecom networks, to funds controlled by Doughty Hanson & Co. Limited for about $511 million. The deal fulfills part of a strategic transformation being driven by Anders Gustafsson, CEO of Spirent, to get the company to focus more on other segments such as IP service assurance and 3G wireless.

The network products group had been one of the three primary operating groups of the London-based company, the other two being the communications group and the systems group. The communications division is home to test and measurement, performance analysis and other network assurance solutions for all network types, and is a division that Gustafsson said is expected to yield strong “medium-term” growth.

“This deal is consistent with our stated strategy of realizing maximum value from the network products group, while focusing more on communications activities,” said Gustafsson. “We’ve completed a significant milestone and phase in the transformation that began when I joined the company.” Gustafsson joined Spirent as CEO in August 2004, after being a senior executive at Tellabs.

The company will use about $224 million of the capital gain to fund to pay off debt, and another $88 million for a share buyback program. However, Gustafsson also indicated that Spirent will look at potential acquisitions in certain communications segments. The sale of the network products division is expected to close early next year.