Keysight Advances Software-Centric Solutions Strategy with Planned Acquisition of Synopsys’ Optical Solutions Group

Rhea-AI Summary

Keysight Technologies (NYSE: KEYS) has announced a definitive agreement to acquire Synopsys' Optical Solutions Group, a leading developer of optical design and analysis software tools. This acquisition will expand Keysight's design engineering software portfolio and computer-aided engineering capabilities, adding optical system design, analysis, simulation, and virtual prototyping solutions.

The transaction is subject to customary closing conditions, including regulatory review and the successful closing of Synopsys' proposed acquisition of Ansys, expected in the first half of 2025. This strategic move will enable Keysight to address high-performance system use cases beyond electronics, including optics and photonics, and enhance its ability to help customers innovate efficiently and accelerate time-to-market.

Positive

• Expansion of Keysight's design engineering software portfolio
• Addition of optical system design, analysis, simulation, and virtual prototyping solutions
• Broadening of serviceable addressable market (SAM)
• Enhancement of multi-physics simulation capabilities
• Potential for improved customer innovation and reduced time-to-market

Negative

• Transaction completion dependent on Synopsys' acquisition of Ansys
• Regulatory approval required for the acquisition
• Potential integration challenges with the new business unit

Insights

Financial Analyst

The planned acquisition of Synopsys' Optical Solutions Group by Keysight Technologies is a strategic move to expand its software-centric solutions portfolio. This deal, while subject to regulatory approvals, could significantly broaden Keysight's addressable market in the optical systems design and simulation sector. However, investors should note that the transaction is contingent on Synopsys' acquisition of Ansys, adding a layer of uncertainty. The long timeline until potential closure in 2025 suggests minimal immediate financial impact. While this acquisition aligns with Keysight's growth strategy in design engineering software, the lack of financial details makes it challenging to assess the direct impact on Keysight's bottom line. Investors should monitor for potential synergies and revenue growth opportunities as more information becomes available.

Tech Expert

Keysight's acquisition of Synopsys' Optical Solutions Group marks a significant step in expanding its capabilities in multi-physics simulations. This move is particularly timely given the increasing convergence of electronics and photonics in advanced technologies. The addition of optical system design and simulation tools complements Keysight's existing strengths in RF/microwave EDA, potentially creating a more comprehensive suite for designers working on complex, integrated systems. This could position Keysight as a one-stop shop for design and testing solutions across multiple domains, enhancing its competitive edge. The acquisition also signals Keysight's recognition of the growing importance of optics and photonics in next-generation technologies, which could open up new market opportunities in areas like data centers, telecommunications and autonomous vehicles.

Market Research Analyst

This acquisition reflects the broader trend of consolidation in the EDA and simulation software market, as companies seek to offer more comprehensive solutions to address the increasing complexity of product design. Keysight's move to acquire Synopsys' Optical Solutions Group could be seen as a strategic response to competitors expanding their portfolios. The deal potentially positions Keysight to capture a larger share of the growing market for integrated design and testing solutions. However, the long lead time until the potential closure in 2025 introduces market risks, as technological landscapes and competitive dynamics may shift significantly in the interim. Investors should consider how this acquisition fits into Keysight's long-term strategy and its potential to drive growth in emerging technology sectors that rely heavily on optical and photonic components.

• Broadens Keysight’s growing design engineering software portfolio and computer-aided engineering capabilities.
• Expands SAM with the addition of optical system design, analysis, simulation, and virtual prototyping solutions.
• The transaction is subject to customary closing conditions, including review by regulatory authorities and the successful closing of Synopsys’ proposed acquisition of Ansys, which is pending regulatory approvals and is expected to close in the first half of 2025.

SANTA ROSA, Calif.--(BUSINESS WIRE)-- Keysight Technologies, Inc. (NYSE: KEYS) announced it has entered into a definitive agreement with Synopsys, Inc. (NASDAQ: SNPS) to acquire Synopsys’ Optical Solutions Group, a leading developer of optical design and analysis software tools. The transaction is subject to customary closing conditions, including review by regulatory authorities and the successful closing of Synopsys’ proposed acquisition of Ansys, which is pending regulatory approvals and is expected to close in the first half of 2025.

The Optical Solutions Group will bring a suite of software solutions for optical systems design, analysis, simulation, and virtual prototyping, as well as a seasoned team with deep industry expertise. With the acquisition of this complementary business, Keysight will broaden its design engineering software portfolio and build on its core positions in radio frequency (RF) / microwave electronic design automation (EDA) and physics-based computer-aided engineering capabilities. Taken together, Keysight’s design engineering software and hardware test solutions enable customers to efficiently innovate, accurately predict real-world performance, and accelerate time-to-market.

Niels Faché, Vice President and General Manager, Keysight’s Design Engineering Software, said: “Given the increasing complexity of electronics design, Keysight is excited to expand its software simulation portfolio with the acquisition of Synopsys’ Optical Solutions Group. This acquisition will give us the capabilities to enable high-performance system use cases beyond electronics, including optics and photonics. We look forward to welcoming the business’ employees to Keysight when the transaction closes and working with them to address customers’ critical design challenges requiring multi-physics simulations to predict product performance.”

Ravi Subramanian, General Manager, Synopsys’ Systems Design Group, said: “We are proud of Synopsys’ Optical Solutions Group, which has developed leading optical design tools backed by an expert team of optical engineers and scientists. Keysight will be an excellent future steward for this team, and customers worldwide will benefit from continued, strong competition in the development and delivery of optical design solutions.”

About Keysight Technologies

At Keysight (NYSE: KEYS), we inspire and empower innovators to bring world-changing technologies to life. As an S&P 500 company, we’re delivering market-leading design, emulation, and test solutions to help engineers develop and deploy faster, with less risk, throughout the entire product life cycle. We’re a global innovation partner enabling customers in communications, industrial automation, aerospace and defense, automotive, semiconductor, and general electronics markets to accelerate innovation to connect and secure the world. Learn more at Keysight Newsroom and www.keysight.com.

Source: IR-KEYS

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919486425/en/

INVESTOR CONTACT:

Jason Kary

+1 707 577 6916

jason.kary@keysight.com

MEDIA CONTACT:

Claire Rowberry

+1 339 200 9518

claire.rowberry@non.keysight.com

Source: Keysight Technologies, Inc.

FAQ

What is the purpose of Keysight's acquisition of Synopsys' Optical Solutions Group?

Keysight is acquiring Synopsys' Optical Solutions Group to expand its design engineering software portfolio, add optical system design and simulation capabilities, and address high-performance system use cases beyond electronics, including optics and photonics.

When is the Keysight (KEYS) acquisition of Synopsys' Optical Solutions Group expected to close?

The acquisition is subject to customary closing conditions and is tied to the closing of Synopsys' proposed acquisition of Ansys, which is expected in the first half of 2025.

How will the acquisition affect Keysight's (KEYS) market position?

The acquisition is expected to broaden Keysight's serviceable addressable market (SAM) and strengthen its position in design engineering software, particularly in optical and photonic systems design and simulation.

What new capabilities will Keysight (KEYS) gain from this acquisition?

Keysight will gain capabilities in optical system design, analysis, simulation, and virtual prototyping, complementing its existing RF/microwave electronic design automation and physics-based computer-aided engineering solutions.