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Keysight Unlocks Ixia Takeover Deal With $1.6B in Cash

Ray Le Maistre

Keysight has emerged as the victor in the race to acquire Ixia, landing its prey with an all-cash deal worth $1.6 billion.

The news follows speculation last week that the two test and measurement companies were engaged in M&A talks. (See Keysight Brokers Takeover Talks With Ixia: Reuters.)

Keysight is paying $19.65 per share in cash, about $1.6 billion in total. The companies note that this represents a premium of about 45% over Ixia's share price at the end of December 1, the final day of trading before news started to leak out that Ixia was looking for a buyer. (See Ixia's for Sale. Who Might Buy?)

Since then, Ixia's stock has soared, gaining 34% since December 1 to close last Friday at $18.20.

During the same period, Keysight's share price has gained 4.3% to close Friday at $37.01. It'll be interesting to see what happens to the company's stock today now that the deal is confirmed and a price has been agreed.

Keysight regards Ixia's portfolio of hardware- and software-based networking and wireless test products, which are used to validate the scale, performance and resilience of network elements, protocols and applications, as complementary to its own: Ixia's products 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," noted the company in its official announcement. The combined portfolio will include test tools and processes that will extend from the edge of the network (IoT modules, handsets) through to the IP and cloud core (including data center). (See Ixia Boasts 400GbE Demo First and Ixia Launches Software for Pre-Silicon Testing.)

The companies outlined the various advantages of the deal (including the cost savings and expected revenue upside) in the official deal announcement. (See Keysight to Acquire Ixia for $1.6B.)

The deal, which has already drawn the attention of legal vultures seeking to leech cash from disgruntled investors, is expected to close by the end of October this year.

The question now, though, is whether this deal will act as a catalyst for further test sector consolidation: Both Viavi and EXFO were believed to have been sniffing around Ixia, so what are their options now?

All suggestions welcomed on the message board below.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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1/30/2017 | 5:05:01 PM
Re: I don't see how this can be an isolated move
One thing that will be interesting to see (and hard to evaluate) is the possible interest of the systems integrators -- many of them private consulting companies -- that have developed expertise on the role of monitoring and assurance as a key element of SI, and who might be interested in having some of these capabilities in-house.

--Brian Santo 
[email protected]
1/30/2017 | 9:43:03 AM
I don't see how this can be an isolated move
I don't see how this can be an isolated move -- the appetite for consolidation has been exposed and now more will need to happen - who has got the chops to follow up Keysight's move?
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