Plans by Saltaire-based broadcast systems producer Pace plc to buy a leading US technology business for almost £200 million raised confidence in the company’s prospects.

City analysts praised the move and Pace shares rocketed by ten per cent on the news. Pace said the deal to buy California-based Aurora Networks will widen its operations and take it into providing kit for broadband networks that support the convergence of video, data and voice applications.

Pace chairman Allan Leighton, a former Asda boss and Royal Mail chairman, also said the £192 million deal – which needs the support of shareholders – would help it achieve its strategic plan and increase profits and earnings per share.

The acquisition would position Pace to support operators' and consumers’ constant demand for cost effective ever increasing broadband bandwidth and offer cross-selling opportunities.

It described Aurora as a highly profitable and growing business with a blue chip customer base and a market leading position, serving 200 customers in 50 countries including all top ten cable operators in the US.

Aurora also had a strong management team that has delivered 30 straight quarters of profitability.

Pace said buying Aurora would significantly boost earnings in 2014 and accelerate progress towards its improved profitability target of nine per cent return on sales in 2015.

Pace will acquire Aurora for £192 million on a cash-free and debt-free basis, plus a further £8 million payable on completion in connection with tax benefits to be recovered over the three years.

Pace is also using the acquisition as an opportunity to refinance its existing debt facilities with a new £93 million five-year revolving credit facility through HSBC and RBS.

Following completion of the acquisition, Aurora will continue to be run by its senior management team as a strategic business unit of Pace.

Mr Leighton said: “Since the announcement of the Pace Strategic Plan on 17 November 2011, we have consistently delivered on it, achieving almost all of the milestones and targets laid out at that time and there remains significant opportunity for development of the core business.

“The acquisition of Aurora represents an important evolution in this process and enhances our strategy to grow a broader platform across hardware, software and services. Acquiring Aurora will allow Pace to expand beyond our core business and build deeper and more embedded relationships with our customers, which the company believes will strengthen Pace’s position as a market leading solutions provider for the PayTV and broadband industries.”

Pace chief executive Mike Pulii said Aurora’s business complemented Pace’s operations with a leading presence in products that were increasingly important for cable operators.

He said it would provide excellent opportunities for customers, employees and shareholders.