Viavi Solutions Inc. VIAV recently announced that it has entered into a definitive agreement to acquire Inertial Labs, Inc. for $150 million to extend its footprint in several end markets. The acquisition, subject to certain regulatory approvals and customary closing conditions, is expected to close in the third quarter of fiscal 2025 and has a potential for up to $175 million in contingent payments over the next four years. 

Based in Leesburg, VA, Inertial Labs is one of the premier developers, manufacturers and suppliers of high-performance orientation, positioning and navigation solutions. Its products range from Inertial Measurement Units and Inertial Navigation Systems to Assured Positioning, Navigation and Timing, GNSS tracking and LiDAR scanning. It offers several products dedicated to aerospace, defense and industrial applications, which are likely to complement VIAVI's broader aerospace and defense offerings. 
 
Additionally, the cutting-edge solutions of Inertial Labs also support utility inspection via LiDAR and photogrammetry algorithms and provide smart navigation systems for both airborne and autonomous ground vehicles. These capabilities align with VIAVI’s strategy to expand into industrial and autonomous transportation markets, including drone-based applications for LiDAR and camera systems. This marks a significant step toward the company’s entry into autonomous air, land and sea systems within the military and industrial sectors.

Does VIAV Stock Stand to Gain From the Acquisition?

Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics, helping to build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of Original Equipment Manufacturers and service providers to superfast 5G networks. Strength in wireless & fiber testing, 3D sensing products, optical transport, Ethernet, broadband access, video testing and storage network testing markets is likely to augment its revenues in the long run.

With a strong presence in more than 125 countries, the acquisition is expected to ramp up the company's Network and Service Enablement business by generating about $50 million in incremental revenues in the upcoming quarters and being accretive to earnings within the first year of closing. A more favorable financial performance is expected to propel the stock higher.

VIAV’s Stock Price Performance

Shares of Viavi have gained 14.6% over the past year compared with the industry’s growth of 76.4%.

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VIAV’s Zacks Rank and Key Picks

Viavi currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader industry have been discussed below.

Celestica Inc. CLS carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, Celestica delivered an earnings surprise of 10.64%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers. 

InterDigital, Inc. IDCC sports a Zacks Rank of 1 at present. It has a long-term growth expectation of 17.44%

IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.  

The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.

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