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July 22, 2002
LONDON -- Spirent plc (LSE: SPT; NYSE: SPM), a leading international network technology company, today announced that it has agreed to acquire approximately 85 per cent of the issued share capital and options of Caw Networks, Inc. ('Caw'), giving it 100 per cent ownership of the company, for an initial consideration of $49 million (approximately (pound)31.6 million). Deferred consideration up to a value of $60 million (approximately (pound)38.7 million), expected to be satisfied by the issue of a maximum of 32.3 million Spirent shares (see note 1), is payable on an earn-out basis dependent upon the revenues and certain technological milestones achieved by Caw for the year ending 31 December 2003. The transaction is expected to be earnings neutral for Spirent in 2003 and earnings enhancing at all levels of earn-out in 2004. Caw will enhance Spirent's leading position in performance analysis by bringing new test technology at the application layer. Additionally, the acquisition enhances Spirent's opportunities to address the corporate IT market, as the ability to test the application layer is critical for any organisation that depends on the integrity, security and reliability of its website to conduct business with its customers. There are also significant opportunities for development and integration of Caw's technology with Spirent's existing Layer 1 to 3 expertise to test a growing range of applications. Key management of Caw are remaining with the business and, together with the Caw employees, will be incentivised via the deferred consideration and Caw options and restricted shares which will be rolled into equivalent options and restricted shares in Spirent. Nicholas Brookes, Chief Executive of Spirent, commented: "Our existing relationship with Caw, via our current shareholding and the joint development work we have undertaken, has enabled us to validate their technology and the market opportunity it represents. This acquisition provides us with key software technology to pursue a new and critical sector of the market that is highly complementary to our existing performance analysis capabilities. With Caw's technology, we will be able to provide comprehensive Layer 1 to 7 solutions enabling us to further penetrate our existing customer base and broaden our reach in the enterprise IT market." The acquisition is subject to certain closing conditions and is expected to complete in August 2002. Spirent PLC Caw Networks
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