Highlights:
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Cash transaction valued at approximately $1.6 billion
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Accelerates growth initiatives and enhances scale to further
strengthen market position
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Combines world-class talent and IP portfolios to drive innovation and
shareholder value
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Transaction expected to be immediately accretive
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Investor conference call scheduled today at 5:30 a.m. Pacific Time
SANTA ROSA, Calif. & CALABASAS, Calif.--(BUSINESS WIRE)--
Keysight Technologies, Inc. (NYSE: KEYS) and Ixia (Nasdaq: XXIA) today
announced a definitive agreement for Keysight to acquire Ixia in an
all-cash transaction totaling approximately $1.6 billion in
consideration, net of cash. The board of directors of both companies
have unanimously approved the transaction, which is anticipated to close
no later than the end of October 2017 and is subject to customary
closing conditions and approvals.
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Under the terms of the agreement, Ixia shareholders will receive $19.65
per share in cash. This represents a premium of approximately 45 percent
to Ixia’s unaffected closing stock price on Dec. 1, 2016, the last
trading day prior to media reports that Ixia was considering strategic
alternatives, and a premium of approximately 38 percent to the Ixia’s
unaffected 52-week high closing stock price for the period ended Dec. 1,
2016.
“The proposed acquisition of Ixia is in direct alignment with our
strategy to transform Keysight for growth and is 100 percent
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.”
The combination of Keysight and Ixia brings together two highly
complementary companies to create an innovative force in leading-edge
technologies that spans electronic design, device and network
validation, and application and security performance. Ixia has a broad
IP portfolio that encompasses network communications, visibility,
application and security technologies with solutions deeply rooted in
software. Additionally, Ixia’s IP includes extensive networking and
wireless protocols that will extend Keysight’s position in wireless
communications and create a unique combination of Layer 1 through 7
end-to-end solutions that address fast-growing segments of the 5G
communications design and test ecosystem.
“We are confident that Keysight is the ideal partner to accelerate our
growth initiatives and will continue to build upon our successful
20-year history,” said Bethany Mayer, Ixia president and CEO. “Ixia and
Keysight share many of the same values including our dedication to
innovation of leading-edge technologies, and commitment to operational
excellence and financial discipline, which combine to create value for
shareholders. We also have industry leading IP portfolios that are
complementary, deep technical prowess and amazing teams. We believe that
together, Ixia and Keysight have a tremendous opportunity to further
strengthen our market leading positions and create unprecedented value
for our customers, partners, employees and shareholders. The transaction
also provides Ixia shareholders significant cash value at a substantial
premium to market.”
Benefits of the Combination
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Accelerates Keysight’s Growth by Creating a Powerful Innovation
Engine: Enables a unique combination of Layer 1 through 7
end-to-end solutions for assessing performance from the mobile device
to the data center and the cloud. Also expands Keysight’s software
capabilities by adding engineering talent and software-centric
solutions with a high gross-margin profile.
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Enhances Scale, Expands SAM and Deepens Market Penetration:
Increases Keysight’s SAM by approximately $2.5 billion and establishes
a strong position in fast-growing segments. The combined company will
serve over 100 countries around the world, and Keysight’s worldwide
go-to-market strength and sales channel enables Ixia access to
previously untapped non-US NEMs, particularly in Asia.
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Combines Global Talent and Advances Innovation Culture: The combination
brings together two world-class organizations with innovative culture
and common values that will help drive strong collaboration and
innovation.
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Compelling Financial Profile: The combined company will have an
attractive financial profile with enhanced cash flow driven by
synergies, scale and improved revenue growth.
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Immediately Accretive: Keysight expects the transaction 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. Revenue synergies are expected to be in excess of $50
million by year three and $100 million by year five.
Timing and Approvals
The transaction, which is expected to be completed no later than the end
of October 2017, is subject to approval by Ixia shareholders, regulatory
approvals, including expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act, as well
as other customary closing conditions.
Keysight has entered into voting agreements with Errol Ginsberg,
Chairman of the Board of Ixia, and Katelia Capital Group, Ltd.,
collective owners of approximately 23 percent of Ixia’s outstanding
common stock, pursuant to which the shareholders have agreed to vote
their shares in support of the transaction.
Investor Conference Call Scheduled for Today
Keysight and Ixia will host a joint conference call and online webcast
today, Jan. 30 at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time) to
discuss the transaction. This event will be webcast in listen-only mode.
Listeners may log on to the call at Keysight’s Investor website at www.investor.keysight.com
or on Ixia’s website at investor.ixiacom.com.
Interested participants can also access the call by dialing (877)
201-0168 or (647) 788-4901 for international callers. Conference ID
63695238. A slide presentation will be available 15 minutes before the
call, on the Keysight website, under Upcoming Events.
Following the live webcast, an archived version will be available for at
least 90 days. An audio replay of the call will be available at
approximately 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), through
Feb. 6 by dialing (800) 585-8367 or (416) 621-4642 from outside the U.S.
and entering pass code 63695238.
Keysight expects to report financial results for its first quarter of
fiscal 2017 on Thursday, Feb. 16, 2017. Ixia expects to report financial
results for its fourth quarter and year 2016 on Tuesday, Feb. 21, 2017
through a press release and at that time will not hold a conference call.
Advisors
Goldman, Sachs & Co. is serving as financial advisor to Keysight and
Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel.
Deutsche Bank is serving as financial advisor to Ixia and Bryan Cave LLP
is serving as legal counsel to Ixia.
Forward Looking Statements
This news release contains forward-looking statements as defined in the
Securities Exchange Act of 1934 and is subject to the safe harbors
created therein. These forward-looking statements involve risks and
uncertainties that could significantly affect the expected results and
are based on certain key assumptions. Due to such uncertainties and
risks, no assurances can be given that such expectations will prove to
have been correct, and readers are cautioned not to place undue reliance
on such forward-looking statements, which speak only as of the date
hereof. The forward-looking statements contained herein include, but are
not limited to, the manner in which the parties plan to effect the
transaction; the expected benefits and costs of the transaction;
management plans relating to the transaction; the expected timing of the
completion of the transaction; the parties’ ability to complete the
transaction considering the various closing conditions, including
conditions related to regulatory and Ixia shareholder approvals; the
plans, strategies and objectives of management for future operations;
product development, product extensions, product integration,
complementary product offerings and growth opportunities in certain
business areas; the potential future financial impact of the
transaction; and any assumptions underlying any of the foregoing. Actual
results may differ materially from those referred to in the
forward-looking statements due to a number of important factors,
including but not limited to the possibility that expected benefits of
the transaction may not materialize as expected; that the transaction
may not be timely completed, if at all; that Keysight may not be able to
successfully integrate the solutions and employees of Keysight and Ixia
or ensure the continued performance or growth of Ixia’s products or
solutions.
In addition, other risks that Keysight faces include those detailed in
Keysight’s filings with the Securities and Exchange Commission,
including Keysight’s annual report on Form 10-K for the year ended
October 31, 2016. Other risks that Ixia faces include those detailed in
Ixia’s filings with the Securities and Exchange Commission, including
Ixia’s annual report on Form 10-K for the year ended December 31, 2015
Forward-looking statements are based on the beliefs and assumptions of
Keysight’s and Ixia’s management and on currently available information.
Keysight and Ixia undertake no responsibility to publicly update or
revise any forward-looking statement.
Important Additional Information and Where to Find It
Ixia plans to file with the Securities and Exchange Commission and to
mail to its shareholders a proxy statement in connection with the
proposed transaction. The proxy statement will contain important
information about Ixia, the proposed transaction, and related matters.
Ixia also plans to file with the Securities and Exchange Commission
other documents regarding the proposed transaction. BEFORE MAKING ANY
VOTING DECISION, IXIA’S SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT MATERIALS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE. Ixia’s shareholders will be able to obtain free copies of the
proxy statement and other documents filed with the Securities and
Exchange Commission by Ixia through the web site maintained by the
Securities and Exchange Commission at www.sec.gov
or through the investor relations section of Ixia’s website at investor.ixiacom.com.
Participants in the Solicitation
This document does not constitute a solicitation of proxy, an offer to
purchase or a solicitation of an offer to sell any securities. Ixia and
its directors and executive officers may be deemed to be participants in
the solicitation of proxies from Ixia’s shareholders with respect to the
proposed transactions. Information regarding Ixia’s directors and
executive officers is contained in Amendment No. 1 to Ixia’s annual
report on Form 10-K for the year ended December 31, 2015 filed with the
Securities and Exchange Commission on May 5, 2016 and in its proxy
statement for the Ixia’s 2016 annual meeting of shareholders filed with
the Securities and Exchange Commission on May 3, 2016. Additional
information regarding the interests of Ixia’s directors and executive
officers in the transaction will be included in the proxy statement for
the special meeting of Ixia’s shareholders to be held to approve the
transactions contemplated by the merger agreement and in other relevant
documents regarding proposed transaction, when filed with the Securities
and Exchange Commission.
About Ixia
Ixia (Nasdaq: XXIA) provides testing, visibility, and security
solutions, strengthening applications across physical and virtual
networks for enterprises, service providers, and network equipment
manufacturers. Ixia offers companies trusted environments in which to
develop, deploy, and operate. Customers worldwide rely on Ixia to verify
their designs, optimize their performance, and ensure protection of
their networks to make their applications stronger. Learn more at www.ixiacom.com.
Ixia and the Ixia logo are trademarks or registered trademarks of Ixia
in the U.S. and other countries.
About Keysight Technologies
Keysight Technologies (NYSE: KEYS) helps customers bring breakthrough
electronic products and systems to market faster and at a lower cost.
Keysight’s solutions go where the electronic signal goes, from design
simulation, to prototype validation, to manufacturing test, to
optimization in the network. Customers span the worldwide communications
ecosystem, internet infrastructure, aerospace & defense, automotive,
semiconductor and general electronics end markets. Keysight generated
revenues of $2.9B in fiscal year 2016. More information is available at www.keysight.com.
Additional information about Keysight Technologies is available in the
newsroom at www.keysight.com/go/news
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Source: IR-KEYS
View source version on businesswire.com: http://www.businesswire.com/news/home/20170130005514/en/
Source: Keysight Technologies, Inc.