Exfo rejects another Viavi takeover bid

Communications test-equipment choices would get still fewer if Exfo’s board accepts an offer, but that’s highly unlikely.

Mergers and acquisition in the test business are nothing new. If Viavi Solutions has its way, the company would acquire rival telecom/datacom test-equipment company Exfo. Today, Viavi announce that it’s increased its binding proposal from $7.50 per share to $8.00. This fourth offer was soundly rejected.

In a press release this morning, Viavi said: Viavi’s Proposal now values Exfo at approximately US$459 million on an undiluted basis and represents a significant premium of:

• 116% to the NASDAQ closing price on June 4, 2021, the trading day before the announcement of the Going Private Transaction;
• 33 ⅓% to the US$6.00 consideration offer under the Going Private Transaction; and
• 6.7% to Viavi’s previous already-superior proposal to acquire Exfo.

Barely two hours later, Exfo’s CEO Germain Lamonde responded. “For the fourth time, I make it crystal clear to Viavi and to my board of directors at EXFO that as controlling shareholder of EXFO, I would not consider any transaction with Viavi, or any other change of control transaction.”

Had the deal happened, engineers and technicians would have one fewer company to choose from when looking for optical network test equipment. Viavi and Exfo compete by providing handheld, portable, and bench testers for optical fibers, network health, and wireless test. Adding Exfo to Viavi’s portfolio would, however, bring 5G products such as the 5GPro RF spectrum analyzer, which covers both the sub-6 GHz FR1 and mmWave FR2 bands.

Viavi itself is a product of numerous acquisitions and spinoffs. Once known as JDS Uniphase and later JDSU, the company started by manufacturing fiber-optic components. It acquired test-equipment maker Acterna in 2005. Acterna was the combination of Telecommunications Techniques (TTC), Wavetek, and Wandel & Goltermann. Indeed, the product name T-BERD, a fiber-optic tester and still sold today, came from TTC.

Based in Quebec City, Exfo too has made several acquisitions over the years. In 2020, the company acquired InOpticals, which added 400G and 800G optical test equipment to its extensive lineup. The company also acquired Brix Networks, Astellia, and NetHawk, plus others.

The engineering and telecom communities stand to lose from a deal that eliminates a strong competitor from the market.