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Test & Measurement

Spirent: We're Not Prepping for Sale

Spirent Communications plc is not being slimmed down and prettied up for a sale, the president and chief operating officer (COO) of the test system vendor's Communications Group, Rob Piconi, told Light Reading in Chicago this week. (See Spirent Restructures Team and Piconi Packs His Bags.)

Speculation has persisted about Spirent's future since the company's board was overthrown in late 2006 by activist investors led by turnaround investment specialist Ed Bramson. Then in March, Spirent's CEO got his marching orders and Bramson took the helm as executive chairman. (See Spirent Suffers Boardroom Coup and Spirent Spikes CEO .)

In April, following an "Operating Review," the company announced a new restructuring program designed to improve profitability and revenue generation. Now it's engaging in a "Strategic Review," which includes a close analysis of the vendor's "balance sheet structure and other matters." (See Spirent Makes Deeper Cuts .)

The process has pleased investors, as Spirent's share price has risen since the beginning of the year from 57 pence to 75.75 pence (US$1.51) yesterday on the London Stock Exchange .

But some in the test sector say the ongoing review will see the For Sale sign put up at the firm's headquarters, and possibly even see the Service Assurance division, which in January announced its first new customer in years, closed down before the end of the year. (See Spirent Reviews Business and Spirent Wins at Telus.)

Piconi is adamant that there's nothing in such talk. "There's absolutely no truth to talk that [Service Assurance] is being closed down," says the former Lucent man, who adds that the current restructuring isn't a case of trying to pretty up the company for a sale.

"Absolutely not. That's not why I am here. When I talked with Ed about this job I wanted to make sure there wasn't going to be a garage sale," adds Piconi.

Instead, he claims, the current restructuring is cutting out inefficiencies in corporate overhead and is optimizing the product portfolio, but hasn't involved the loss of key product development personnel: "We haven't taken out any core expertise. We are retooling the company and bringing in top talent," such as supply chain expert Chris Wiese, who has joined from Alcatel-Lucent (NYSE: ALU).

Piconi, though, says he can't talk about how many staff have been made redundant as part of the process.

Yet it does appear that a number of folk have recently left the company -- it wasn't too hard to find staff on the stands of other NXTcomm exhibitors who had recently jumped from the Spirent ship. "I'm not worried about individuals who have left," says Piconi defiantly.

Instead, he says, he is focused on building up areas of strength, including investing more in wireless test capabilities such as WCDMA (3G) and even developing early lab test tools for LTE (Long-Term Evolution), one of the so-called 4G wireless technologies.

And then there's the latest version of Spirent's key platform, TestCenter. New functionality was announced at NXTcomm, along with impressive endorsements from Alcatel-Lucent and Cisco Systems Inc. (Nasdaq: CSCO). (See Spirent Updates TestCenter and AlcaLu, Cisco Pick Spirent.)

The new TestCenter release is "focused on cutting down test time in the lab. Product quality and time to market are increasingly important," says Piconi.

— Ray Le Maistre, International News Editor, Light Reading

digits 12/5/2012 | 3:06:23 PM
re: Spirent: We're Not Prepping for Sale Even if, as Rob Piconi says, the company is not being prettied up for a sale, that doesn't mean Spirent won't get any takeover offers.

But who might want it? Who would make a good fit with Spirent?
lighthearted37 12/5/2012 | 3:06:22 PM
re: Spirent: We're Not Prepping for Sale
If you believe the lines from upper management at Agilent or JDSU at different times in the past 10 years, a large component vendor might make sense. The idea was that components lag the market and test gear leads the market, smoothing out overall business activity.

Agilent since changed its mind and sold off its component business a couple years ago, believing (probably correctly for the tech world) that pure plays are rewarded better simply because analysts can understand them better. Just about the same time, JDSU purchased Acterna. Their stock has been both up and down greatly since then so investors and management there are still trying to figure out if it was a good move.
digits 12/5/2012 | 3:06:21 PM
re: Spirent: We're Not Prepping for Sale The idea that JDSU might have a word about adding to its test and measurement business was generally thought to be highly likely by many I spoke to at NXTcomm...
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