Keysight confirms Ixia buy

Jan. 30, 2017
Keysight Technologies, Inc. (NYSE: KEYS) and Ixia (Nasdaq: XXIA) have confirmed media reports that the former will acquire the latter. Keysight will buy its fellow test and measurement instrument maker in an all-cash deal worth approximately $1.6 billion, net of cash. Both company boards have approved the agreement, which they expect will close no later than the end of October 2017, subject to customary closing conditions and approvals, including approval by Ixia's shareholders.

Keysight Technologies, Inc. (NYSE: KEYS) and Ixia (NASDAQ: XXIA)have confirmed media reports that the former will acquire the latter. Keysight will buy its fellow test and measurement instrument maker in an all-cash deal worth approximately $1.6 billion, net of cash. Both company boards have approved the agreement, which they expect will close no later than the end of October 2017, subject to customary closing conditions and approvals, including approval by Ixia's shareholders.

Keysight will page Ixia shareholders will receive $19.65 per share in cash, premium of approximately 45% to Ixia's unaffected closing stock price on December 1, 2016, which the companies identify as the last trading day prior to media reports that Ixia was considering strategic alternatives. The price also reflects a premium of approximately 38% to the Ixia's unaffected 52-week high closing stock price for the period ended December 1, 2016.

The two parties have positioned the transaction as a combination of complementary companies. Keysight is strong in test instrumentation for laboratory and manufacturing applications focused on both electronics and optics. The company also provides a range of instrument targeted at wireless networks and technology development. Ixia also has instruments in the wireless networking field, as well as test instruments for wireline networks and technologies. In this realm, the company has been particularly strong in high-speed Ethernet.

Ixia also makes security products and network visibility systems and software.

Keysight appears to be particularly excited about the possibilities the combination will enable in the wireless realm, stating the combined company will provide Layer 1 through 7 capabilities for 5G applications.

"The proposed acquisition of Ixia is in direct alignment with our strategy to transform Keysight for growth and is 100% complementary to our business," said Ron Nersesian, Keysight president and CEO. "The combination creates a powerful innovation engine to fuel growth, expands our software-centric solutions, and builds new opportunities through sales and technology leverage. Ixia also brings a world-class level of talent, and together, we will provide leading-edge solutions that address the fastest-growing communications and networking trends including 5G, IoT, visibility, security, and application performance."

Keysight also expects the acquisition to be immediately accretive to adjusted earnings, with annual cost synergies of $60 million, of which $50 million is expected to be achieved within 24 months. The purchaser expects revenue synergies in excess of $50 million by year three and $100 million by year five.

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