Fitch: Keysight to negative

Fitch Ratings said it affirmed the ratings on Keysight Technologies Inc., including its long-term issuer default rating at BBB, senior unsecured revolving credit facility rating at BBB and senior unsecured notes at BBB.

The agency also said it revised the outlook to negative from stable.

Fitch said it believes the recently announced acquisition of Ixia will complement Keysight's leadership positions in wireless devices and operators markets within the company's commercial communications segment.

As a result of the combination, Keysight will add data center and cloud testing solutions to existing mobile-device offerings, accelerating the company's current mature growth profile, the agency said.

The deal also adds considerable engineering and software capabilities, which should result in a richer sales mix, Fitch explained.

The company is expected to fund the all-cash transaction with a combination of debt and existing cash or equity, given that a considerable amount of Keysight's cash is located offshore, the agency said.

Pro forma for the deal, Fitch said it expects the company’s total debt-to-operating EBITDA will be 3x to 3.5x, depending upon the ultimate funding mix.

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