Keysight Technologies has acquired Ixia in an all-cash transaction totaling approximately $1.6bn. Ixia brings to Keysight a broad IP portfolio that encompasses network communications, visibility, application and security technologies with solutions deeply rooted in software.
Ixia’s IP also includes extensive networking and wireless protocols that will extend Keysight’s position in wireless communications and create a unique combination of Layer 1 through 7 end-to-end solutions that address fast-growing segments of the 5G communications design and test ecosystem.
“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, Keysight president and CEO. “The combination creates a powerful innovation engine to fuel growth, expands our software-centric solutions and builds new opportunities through sales and technology leverage. Ixia also brings a world-class level of talent, and together, we will provide leading-edge solutions that address the fastest-growing communications and networking trends including 5G, IoT, visibility, security and application performance.”
“We are confident that Keysight is the ideal partner to accelerate our growth initiatives and will continue to build upon our successful 20-year history,” said Bethany Mayer, Ixia president and CEO. “Ixia and Keysight share many of the same values including our dedication to innovation of leading-edge technologies, and commitment to operational excellence and financial discipline, which combine to create value for shareholders. We also have industry leading IP portfolios that are complementary, deep technical prowess and amazing teams. We believe that together, Ixia and Keysight have a tremendous opportunity to further strengthen our market leading positions and create unprecedented value for our customers, partners, employees and shareholders. The transaction also provides Ixia shareholders significant cash value at a substantial premium to market.”
Keysight says the deal will create a powerful innovation engine which enables a unique combination of Layer 1 through 7 end-to-end solutions for assessing performance from the mobile device to the data centre and the cloud. It also expands Keysight’s software capabilities by adding engineering talent and software-centric solutions with a high gross-margin profile.
The deal will increase Keysight’s SAM by approximately $2.5bn and establishes a strong position in fast-growing segments. The combined company will serve over 100 countries around the world, and Keysight’s worldwide go-to-market strength and sales channel enables Ixia access to previously untapped non-US NEMs, particularly in Asia.
Keysight expects the transaction to be immediately accretive to adjusted earnings with annual cost synergies of $60m, of which $50m is expected to be achieved within 24 months. Revenue synergies are expected to be in excess of $50m by year three and $100m by year five.