Keysight Technologies Announces Pricing of Public Offering of Senior Unsecured Notes

Rhea-AI Summary

Keysight Technologies (NYSE: KEYS) has announced the pricing of a public offering of senior unsecured fixed rate notes totaling $750 million. The notes will mature in 2030 with an annual interest rate of 5.350%.

The offering is expected to close on April 17, 2025, subject to customary conditions. The company plans to use the proceeds for general corporate purposes, including partial financing of their proposed acquisition of Spirent Communications plc.

The offering's joint lead book-running managers are BNP Paribas Securities, Citigroup Global Markets, and BofA Securities, with Barclays Capital and J.P. Morgan Securities serving as additional book-running managers.

Positive

• Secured significant funding of $750 million through senior notes offering
• Strategic financing for Spirent Communications acquisition

Negative

• Takes on substantial new debt with 5.350% interest rate
• Increased interest expenses will impact future cash flows

Insights

Financial Analyst

Keysight's $750 million senior unsecured notes offering represents a substantial capital raising activity with several implications for the company's financial structure. The 5.350% interest rate and 2030 maturity establish a fixed long-term obligation that will impact their debt service requirements for the next five years. This rate appears reasonable given the current elevated interest rate environment, securing medium-term capital at a predictable cost.

The debt issuance will increase Keysight's leverage and modify their debt-to-equity ratio, though the specific impact depends on their existing capital structure. By choosing debt over equity financing, management avoids dilution for current shareholders but accepts higher financial leverage and increased interest expenses going forward.

Most notably, earmarking these funds for the Spirent Communications acquisition indicates this is strategic growth capital rather than refinancing existing obligations. The decision to secure acquisition financing ahead of closing suggests confidence in completing the transaction. For investors, this represents a significant financial commitment that transforms Keysight's balance sheet while potentially enabling expansion into new capabilities through Spirent.

M&A Specialist

This $750 million debt offering signals Keysight's serious commitment to completing their previously announced Spirent Communications acquisition. The explicit mention of using proceeds for this transaction confirms it remains a strategic priority despite the substantial financing costs involved.

The choice to use debt financing for acquisitions is standard practice when companies want to preserve cash reserves while pursuing growth. The 5.350% interest rate becomes part of the acquisition's carrying cost, creating a hurdle rate that the Spirent integration must exceed to create shareholder value.

Securing defined financing terms now reduces uncertainty around the acquisition's funding structure and likely satisfies a key condition for closing the transaction. While the article doesn't specify what portion of the total acquisition price this debt will cover, the size suggests it's a significant component of the overall funding strategy.

Investors should view this as confirmation that Keysight is proceeding with their inorganic growth strategy rather than merely announcing an acquisition without securing the necessary capital backing. The 2030 maturity provides a reasonable timeframe for integrating Spirent and realizing the expected synergies before refinancing.

SANTA ROSA, Calif.--(BUSINESS WIRE)-- Keysight Technologies, Inc. (NYSE: KEYS) (“Keysight”) today announced the pricing of an underwritten, registered public offering of its senior unsecured fixed rate notes in an aggregate principal amount of $750,000,000 (the “Offering”). The notes will mature in 2030 and will bear interest at an annual rate of 5.350 percent. The offering is expected to close on April 17, 2025, subject to customary closing conditions.

Keysight intends to use the net proceeds from the Offering for general corporate purposes, which may include partially financing the previously announced proposed acquisition of Spirent Communications plc.

BNP Paribas Securities Corp., Citigroup Global Markets Inc. and BofA Securities, Inc. are the joint lead book-running managers for the Offering. Barclays Capital Inc. and J.P. Morgan Securities LLC are also book-running managers for the Offering.

The Offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (“SEC”) and will be made only by means of a prospectus supplement relating to such Offering and the accompanying base shelf prospectus, copies of which may be obtained by contacting: BNP Paribas Securities Corp., 787 Seventh Avenue, 7th Floor, New York, NY 10019, telephone: (800) 854-5674 or by emailing DL.US.Syndicate.Support@us.bnpparibas.com; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (800) 831-9146 or by emailing prospectus@citi.com; BofA Securities, Inc., Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, telephone: (800) 294-1322 or by emailing dg.prospectus_requests@bofa.com; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (888) 603-5847 or by emailing barclaysprospectus@broadridge.com; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by emailing prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com. These documents have been filed with the SEC and are available at the SEC’s website at www.sec.gov.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities, nor shall there be any sale of these securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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 lifecycle. 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.

Forward-Looking Statements

This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The words “intend,” “will,” and similar expressions, as they relate to Keysight, are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysight’s management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions 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. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, Keysight’s expectations regarding the completion and timing of the proposed offering and use of proceeds. Such risks and uncertainties include, but are not limited to, market conditions and the satisfaction of customary closing conditions related to the proposed offering.

In addition to the risks above, other risks that Keysight faces include those detailed in Keysight’s filings with the SEC, including Keysight’s annual report on Form 10-K for the period ended October 31, 2024 and Keysight’s quarterly report on Form 10-Q for the period ended January 31, 2025.

Source: IR-KEYS

View source version on businesswire.com: https://www.businesswire.com/news/home/20250410970988/en/

Harry Blount

+1 707-577-2349

harry.blount@keysight.com

Source: Keysight Technologies, Inc.

FAQ

What is the size and interest rate of Keysight's (KEYS) new senior notes offering?

Keysight's senior notes offering totals $750 million with a 5.350% annual interest rate, maturing in 2030.

When will Keysight's (KEYS) senior notes offering close?

The senior notes offering is expected to close on April 17, 2025, subject to customary closing conditions.

How will Keysight (KEYS) use the proceeds from the senior notes offering?

The proceeds will be used for general corporate purposes, including partial financing of the proposed Spirent Communications plc acquisition.

Which banks are managing Keysight's (KEYS) senior notes offering?

BNP Paribas Securities, Citigroup Global Markets, and BofA Securities are lead managers, with Barclays Capital and J.P. Morgan Securities as additional book-runners.