Test vendor Keysight Technologies has made a bid to acquire competitor Anite in a transaction valued at about $606 million that could boost Keysight’s software testing capabilities as the telecom industry moves toward more software-oriented networks.
The boards of the two companies announced this morning that both sides have agreed to the offer, which must be approved by shareholders and regulators and is expected to close in October.
This is Keysight’s biggest acquisition since its spin-off from Agilent Technologies last year, and once again changes the makeup of a company with roots going back to Hewlett-Packard. Anite sold off its travel-related business segment last year, turning it into a pure-play test company that now will become part of the much larger Keysight. Keysight has nearly 1,000 employees and reported net revenue of about $3 billion for the 12 months ended April 30. Anite, for comparison, had about $170 million in revenue during its last full fiscal year and has about 500 employees. Anite also boosted its abilities in data post-processing and analytics last year through the acquisition of Xceed.
Ron Nersesian, president and CEO of Keysight, said in a statement that the transaction is expected to have a positive impact on earnings in the first year, generate a 15% return on invested capital within five years, and that it is “an effective use of Keysight’s cash – specifically overseas cash – to provide growth.
“Engineers need both software and hardware tools to design both the hardware and complex software within wireless devices,” Nersesian said. “Keysight currently provides the software and hardware tools which enable engineers to design and test the electronic hardware portion of wireless devices commonly known as the physical layer. Anite currently provides the software and hardware tools used to design and test the software portion of wireless devices also known as the software layer.”
Nersesian went on to say that the purchase expands Keysight’s addressable market in wireless research and development and network testing, gives a boost to Keysight’s software solutions and will lead to increased sales from research and development customers.
Olga Yashkova, program manager for the test and measurement practice at Frost & Sullivan, told RCR Wireless News that she wasn’t surprised to see Keysight making an acquisition.
“It made perfect sense to me for Keysight to acquire Anite,” Yashkova said, adding that the two companies have been in partnership for some time already. “Both of the companies are among the leaders in wireless R&D testing, and I see a lot of synergy between them. This acquisition will expand Keysight’s product portfolio into software layer design validation testing for mobile devices, as well as allow them to enter the network testing market with Anite’s Nemo product line, where Anite is taking the number two position globally.”
Yashkova added that the acquisition is a “very significant one for the entire test and measurement industry, as it is expected to further strengthen Keysight’s market share.”
Clay Brendish, chairman of Anite, commented that the combination of Anite with Keysight “has strong strategic logic, with Anite’s software expertise strongly complementing Keysight’s hardware expertise. Our market has been characterized by ongoing customer consolidation, increasing the importance of scale and strength to support customers around the globe and invest in major research and development programs across the technology cycle. Keysight brings the scale and financial resources to continue to develop Anite’s business.”
