Some M&A activity among those companies that work behind the scenes so that carriers can continue to deliver your apps, streamed music, phone calls and texts without a hitch: the network testing company Ixia has announced that it will be paying $160 million in cash to buy BreakingPoint Systems. BreakingPoint is a specialist in security testing for wireless and wireline networks, as well as attack analytics, with more than 34,000 examples of attacks, malware and exploits parsed in its library.
The move means that Ixia will be able to offer its carrier and large enterprise customers a fuller portfolio of services for network testing — but perhaps more importantly it is a sign of how the growth in mobile and fixed data networks — on the back of the smartphone and tablet boom — has led to a bigger focus on security threats, data breaches and privacy protection.
The deal comes on the heels of Ixia’s purchase of another network performance company, Anue Systems, in May for $145 million. Vic Alston, president and CEO of Ixia, would not comment on whether the company is continuing on its acquisitions sprees. “We will never say never, but our main priority at this point is to integrate Anue and BreakingPoint and focus on growth,” he told TechCrunch.
Ixia says the deal is expected to close this quarter (Q3) 2012, subject to customary closing conditions and approvals.
BreakingPoint has built a business that provides not only security monitoring services and hardware products, but also comprehensive analytics. Customers include government agencies and large enterprises as well as carriers. The company has been growing its business consistently over the last four quarters, with sales growing by over 40 percent in 2011 to $33.5 million, on a gross margin of 87 percent. Ixia expects 2012 to show another 40-percent in growth.
This should come as no surprise given the double whammy of strong data network growth, combined with what Verizon called in its Data Breach Investigations Report, the rise of the “megabreach” from hackers. In a study carried out with a number of government agencies, it found that 2011 was the worst-ever year for data breaches, and the frequency of them appears to be on the rise.
It’s a trend that has clearly motivated Ixia into action, too: no matter how well a network performs, it’s useless if it gets taken down by hackers:
“The current threat landscape is changing everything – from the way we conduct business, to how we protect data and secure infrastructures, to the ways we train cyber warriors,” said Vic Alston, Ixia’s president and chief executive officer, in a statement.
“This dynamic IT landscape is creating a growing demand for solutions that provide definitive and current insight into the resiliency of critical IT infrastructures and defences…By leveraging BreakingPoint with Ixia’s integrated portfolio of proven network test products, customers will have available to them an end-to-end solution to help ensure business continuity for enterprises and government organisations.”
For its part, Ixia is also seeing a small increase in its own business. The company’s estimated up revenues for Q2 to $87-89 million from $86-89 million previously. The company has been on a buying spree of sorts: it recently also bought another network performance player, Anue Systems, which is already adding $3-4 million to its quarterly sales.