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Keithley offloads RF business to Agilent

Posted: 26 Nov 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Keithley RF line? acquisition? wireless business?

Keithley Instruments Inc. has signed a definitive agreement to sell substantially all of its RF product line to Agilent Technologies Inc.

"Because we have placed a high emphasis on profitability in fiscal 2010 and beyond, we concluded that we could no longer continue to support our significant investment in RF measurement products, and should instead focus on growing our core business," stated Joseph Keithley, chairman, president and CEO of Keithley. "The impact of the economic downturn changed the expected timing of the returns we were anticipating from our RF product line, extending them beyond a time-frame that we were willing to continue to support. We are pleased that Agilent will be assuming this product line. Both Keithley and Agilent will work to provide high quality service and support through the transition for our customers using these products."

Subject to the completion of customary closing conditions, it is anticipated that the transaction will close around November 30, 2009. Following the closing, it is anticipated that the majority of the RF team will become Agilent employees. Under the terms of the agreement, Keithley will transfer substantially all of the assets associated with the RF product line to Agilent which will assume certain related liabilities. Agilent will provide global sales, service and support for the existing RF product line.

Keithley expects to receive cash proceeds of approximately $9 million and to realize a pre-tax gain in the range of $2.5 to $3.5 million during the quarter ending December 31 as a result of the sale.

Keithley's sales and earnings guidance provided on November 17, 2009 remains unchanged as a result of this transaction. Based on current expectations, Keithley is estimating sales Q1 10 to range between $23 and $27 million and earnings before taxes to range from a loss to a profit, excluding the impact of the gain on the sale of the RF product line. Keithley's strategic focus is on managing the company to ensure profitability in the short-term that will continue into the long-term. As a result of the significant cost reduction actions the company has taken since September 2008, including the discontinuance of its S600 product line and the anticipated sale of its RF product line, the company has lowered its annual break-even sales point to approximately $90 million, depending upon gross margins.

"Keithley remains committed to serving the challenging materials, device, and process measurement requirements that enable innovation within the electronics industry. As part of our initiative to improve our profitability in fiscal 2010, we made the decision to focus on growing our core business. We remain committed to supporting our customers in the semiconductor, wireless, precision electronics, and research and education industry segments, serving applications in research, development and production. The divestiture of our RF product line enables us to increase our focus on our core technologies and we intend to expand our efforts to leverage these strengths in support of new growth opportunities such as energy efficiency related devices and materials," stated Keithley.

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