(Bloomberg) -- Viavi Solutions Inc. has agreed to buy Spirent Communications Plc at 172.5 pence per share in cash in an offer that values the UK-based network testing company at £1 billion ($1.27 billion) on a fully diluted basis. 

Viavi will also pay a special dividend of 2.5 pence per share, the communications equipment company said in a statement on Tuesday. The deal still has to be approved by Spirent’s shareholders. 

The offer represents a 61% premium of Spirent’s closing share price on Monday. Silver Lake Management will make a $400 million long-term strategic investment in Viavi in connection with the deal. 

Spirent’s shares rose 58% to 171.10 pence at 8:58 a.m. in London. 

Spirent provides automated testing for networks and is used by companies that provide 5G, cloud and autonomous vehicle services. Orders fell short of expectations last year, causing the company to warn in October that sales for the first nine months of 2023 would be significantly lower than the same period in 2022.

Read More: Spirent Plunges Most Since 2002 After ‘Materially Short’ Quarter

Telecom service providers that use Spirent’s services have been hit with their own challenges, grappling with increasing costs and delaying unnecessary spending. An anticipated increase in orders from Chinese customers in the third quarter didn’t happen after the government reduced its spending plans, the company said in a statement at the time. 

(Updates with share price in third paragraph. A previous version corrected size of the cash offer.)

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