Santa Rosa-based Keysight to acquire Anite in U.K.

SANTA ROSA - Keysight Technologies reported June 16 that Keysight Netherlands B.V., a wholly owned indirect subsidiary of Keysight Technologies, would acquire Anite, a U.K.-based leading supplier of test and measurement solutions to the international wireless market, for $606 million in cash.

“As a leading supplier of software solutions for wireless research and development, Anite is aligned with Keysight’s strategy to grow in wireless and increase our software offerings,” said Ron Nersesian, Keysight president and CEO, in a statement.

“The combination of Keysight and Anite - two global leaders with complementary strengths - enables us to offer a broad portfolio of leading-edge solutions throughout the wireless research and development cycle. This will help us to expand our portfolio into the software layer for design and validation, and expand Keysight’s position as a supplier for wireless design and validation tools,” Nersesian said.

“We look forward to welcoming the talented team at Anite and the value this combination will deliver to customers worldwide,” he said.

Anite, based in Fleet, U.K., is a global supplier of software-centric solutions that enable efficient design and validation of chipsets, mobile devices and network equipment. Its customers include major manufacturers of mobile devices, chipsets and network equipment, mobile network operators, regulatory authorities and independent test houses. With offices in 14 countries, Anite has more than 500 employees throughout the world.

Pending approval of regulators and Anite shareholders, the deal is expected to close by the end of October.

Keysight Technologies, a Santa Rosa-based global electronic measurement technology company, had annual revenue of about $2.9 billion in fiscal year 2014. In November, Keysight completed its separation from former parent Agilent Technologies. The final connection between the two companies, an agreement for information technology support, concluded during the second quarter.

In its fiscal second quarter as an independent company, Keysight Technologies held revenue steady at $740 million compared to the same quarter last year but saw orders drop by 11 percent from $782 million to $697 million.

Keysight expects third-quarter revenue to drop 10 percent to 16 percent - to between $635 million and $675 million.

Keysight earned 70 cents a share in the second quarter.

The company in May revealed plans to reduce costs by $25 million over the next two years by offering bonuses to longtime employees as an enticement to retire and by closing the company’s defined-benefit plan to new entrants.

An $85 million drop in orders year-over-year was due to currency shifts, loss of sales to Russia due to economic sanctions, and nonrecurring large orders. About $23 million of the order decline was due to currency shifts.

About $15 million was due to a falloff in orders from Russia. Sales there declined nearly 40 percent, according to Guy Séné, Keysight’s senior vice president of measurement solutions and worldwide sales.

“It’s significantly down,” Séné said.

Sales to Russia accounted for about 3 percent of Keysight’s overall revenue. Sanctions against Russia have hurt sales, as well as a declining economy and the fall of the ruble. Sanctions have been in place since Russia made expansionist moves in the Ukraine.

More than $46 million of the total order drop came from two large deals that were reported in the second quarter of last year that did not recur in this year’s second quarter.

“We know clearly where it comes from,” Séné said of the decline. “Two large customers” were building capacity at that time.

Regarding the expected decline in third-quarter revenue, “the overall economy is mixed,” Séné said.

Earnings per share are expected to drop from 70 cents to between 37 cents and 51 cents.

In its first fiscal quarter as an independent company, Keysight Technologies reported $701 million, up 4 percent from the previous year.

Sales to Russia were already impacted in the first quarter.

Sales in Japan also declined about 15 percent, with two-thirds of that drop due to currency weakness of the yen against the dollar. Sales to Japan accounted for about 10 percent of Keysight revenue.