Test and measurement company Keysight Technologies announced its deal to acquire rival Ixia for $1.6 billion in cash.
Ixia shareholders will receive $19.65 per share in cash – representing a premium of approximately 45 percent to Ixia’s closing stock price on December 1, 2016.
“The proposed acquisition of Ixia is in direct alignment with our strategy to transform Keysight for growth and is 100 percent complementary to our business,” said Ron Nersesian, president and CEO of Keysight Technologies.
Keysight and Ixia offer technologies that spans electronic design, device and network validation, and application and security performance.
Ixia has an IP portfolio that includes network communications, visibility, application and security technologies with solutions rooted in software. Ixia’s IP includes extensive networking and wireless protocols that will extend Keysight’s position in wireless communications.
Bethany Mayer is the president and CEO of Ixia. Errol Ginsberg, chairman of the Board of Ixia, and Katelia Capital Group, own approximately 23 percent of Ixia.
The acquisition will enable Keysight to have a combination of Layer 1 through 7 end-to-end solutions for assessing performance from the mobile device to the data center and the cloud. Ixia will expand Keysight’s software capabilities by adding engineering talent and software-centric solutions.
The deal increases Keysight’s SAM by approximately $2.5 billion and establishes a strong position in fast-growing segments. The combined company will serve over 100 countries. Keysight’s market strength and sales channel enable Ixia to tap non-US NEMs, particularly in Asia.
Keysight expects the transaction to be accretive to adjusted earnings with annual cost synergies of $60 million, of which $50 million is expected to be achieved within 24 months. Revenue synergies are expected to be in excess of $50 million by year three and $100 million by year five.
