Ixia (News - Alert) has acquired cyber security leader, BreakingPoint Systems for $160 million

Companies point out that there will be more consolidation in the network test and visibility solutions industry going forward. This is a market with well-established companies and with high barriers for entry. As the market becomes increasingly mature, leading companies are seeking ways to improve their offerings. A key strategy to complete one's offering is through acquisitions. Mergers and Acquisitions (M&A) are often witnessed in industries presumed to offer value generation and high growth potential. The value creation comes from the idea that the new joint company will be able to generate more value than the separate firms. This is exactly what Ixia (NASDAQ: XXIA) aims to do by acquiring BreakingPoint Systems, Inc. (BreakingPoint), a global cyber security leader.

Ixia had originally looked at BreakingPoint as a key growth strategy partner. In July, Ixia announced its decision to acquire BreakingPoint for $160 million cash. According to the company, the transaction is anticipated to close in the third quarter of 2012.

BreakingPoint Systems' Position

Breaking Point has made significant inroads in the security testing industry by bringing new insights into the global threat landscape and providing the most advanced tools to provide visibility and recognize latest applications and emerging threats at Internet-scale.   

According to the company, the most prominent companies from all vertical markets and government institutions worldwide are currently using BreakingPoint’s products as their first choice to battle with wired and wireless infrastructures, improve network and data center systems and renovate security processes to be practical and operative. BreakingPoint’s cyber security complements Ixia’s end-to-end integrated network monitoring, testing and optimization systems.

Ixia forecasted that BreakingPoint would achieve a more than 40 percent growth rate in 2012. As part of the forecasted growth rates, Ixia is committed to investing and growing the BreakingPoint product line.

Ixia’s Position and Benefits of Acquiring BreakingPoint

Ixia is a global leading supplier of converged internet protocol (IP) and wireless network test and visibility solutions. With the acquisition of BreakingPoint, Ixia has put itself in a much stronger position to expand its product portfolio and its exposure to the top of the value chain in application testing and security. Holistically, this acquisition represents a complementary nature of Ixia’s products, thus enabling them to provide a solution portfolio that encompasses an entire offering of application security solutions; whether it is security testing, cloud, virtualization, voice over internet protocol (VoIP) or video applications. 

Ixia continues to work closely with many Tier 1 service providers and cloud providers throughout the world, who need someone to provide a solution that allows holistic testing to the cloud environment for security and scalability performance.  This acquisition enables Ixia to expand its product beyond the pre-production test and turn it into an integrated vendor that supports every element of the information technology (IT) infrastructure- from the device to the network systems monitoring.

The acquirement of BreakingPoint strengthens Ixia’s position as a market leader that would provide a unique end-to-end solution in application testing and security.

Ixia’s approach to security testing with an end-to-end ongoing security solution fits well with the requirement of many enterprises that need to test every aspect of the IT infrastructure from a security standing point. Enterprises are demanding greater insights and better visibility into emerging security threats and new applications. Top companies are upgrading their internal ability to predict and prevent the impact of malicious attacks. There is a growing market for these kinds of requirements and the purchase of BreakingPoint will help fulfill that vision. Frost & Sullivan (News - Alert) foresees that companies who are seeking M&As, such as Ixia will be in a leading position in the coming years to share best practices in the worldwide security market.

From a market standing point, Ixia has a very strong presence in regions such Asia-Pacific and Europe as well. Therefore, Ixia is in a better position to bring BreakingPoint’s solutions to more countries by combining its regional sales forces to further increase brand awareness.

Final words

The network testing market has seen a number of key acquisitions in the last months such as Spirent’s (News - Alert) acquisition of Mu Dynamics, Inc. in April of 2012 as well as Ixia’s recent acquisition of Anue Systems Inc. in May of the same year. It is interesting to note that the network testing market is becoming consolidated with only a few very recognized companies, but none the less is still managing to grow in a significant way. We see technology acquisition as being critical to accelerating innovation and product capabilities in order to meet new customer requirements. By looking at security management solutions that ensure business continuity, companies clearly need to do more than just offer stand-alone solutions. Frost & Sullivan sees mergers and acquisitions as a way to drive technological trends towards an integrated and comprehensive approach. Strategic acquisitions are key for a company to strengthen its competitive position in a given market that offers high growth potential. They are even more vital in markets that are becoming mature in which every company is investing to differentiate itself in order to get a larger piece of the pie. The attainment of BreakingPoint bodes well for Ixia in terms of future enhancements of its portfolio in providing an end-to-end solution that improves converged networks business.

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