XML 21 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
ACQUISITION OF ANITE (Notes)
 9 Months Ended
Jul. 31, 2016
Business Acquisition [Line Items]  
Business Combination Disclosure [Text Block]
3.    ACQUISITION OF ANITE

On August 13, 2015, we acquired all share capital of Anite for a cash price of approximately $558 million, net of $43 million of cash acquired. Anite is a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions. As a result of the acquisition, Anite became a wholly-owned subsidiary of Keysight. Accordingly, the results of Anite have been included in Keysight's consolidated financial statements from the date of the acquisition. During the third quarter of 2016, the fair value measurements of assets acquired and liabilities assumed as of the acquisition date were revised. The total purchase price allocation adjustment to goodwill was approximately $3 million and related primarily to a reduction in the allocation to property, plant and equipment. The effect on earnings due to changes in depreciation and other income effects as a result of the change to the provisional purchase price allocation amounts were not material to our condensed consolidated financial statements.

In February 2016, we paid approximately $1 million related to the contingent consideration established during the preliminary purchase price allocation in connection with Anite's equity-settled share-based payment arrangements.

Acquisition and integration costs directly related to the Anite acquisition totaled $5 million and $12 million for the three and nine months ended July 31, 2016, respectively, and were recorded in selling, general and administrative expenses.

The following represents pro forma operating results as if Anite had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2014 (in millions, except per share amounts):
 
Three Months Ended July 31, 2015
 
Nine Months Ended July 31, 2015
Net revenue
$
700

 
$
2,243

Net income
$
53

 
$
222

Net income per share - Basic
$
0.31

 
$
1.32

Net income per share - Diluted
$
0.31

 
$
1.30


The unaudited pro forma financial information for the three and nine months ended July 31, 2015 combines the historical results of Keysight and Anite for the three and nine months ended July 31, 2015, assuming that the companies were combined as of November 1, 2013 and includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, the impact on cost of sales due to the respective estimated fair value adjustments to inventory, and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014.