Ixia Splashes $160M on Security Firm

2012-07-13 13:51:00

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Ixia Splashes $160M on Security Firm 
Test equipment vendor Ixia (Nasdaq: XXIA) is to acquire security testing specialist BreakingPoint Systems for US$160 million in cash, with the deal set to be completed during the next three months. The move will give Ixia a broader set of test tools with which it can target network and data center operators, as BreakingPoint's expertise is in identifying security threats and assessing the capabilities of networks to resist attacks.BreakingPoint generated revenues of $33.5 million in 2011 and is expected to achieve sales of more than $47 million this year. Ixia expects BreakingPoint to contribute to its profits (before one-time costs) in the first full quarter of business once the acquisition is completed.The security test systems firm counts network operators such as KT Corp. (Korea Telecom), infrastructure vendors such as Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR), enterprises and government agencies among its customers. (See BreakingPoint Stresses Juniper Gateway and BreakingPoint Updates Firewall Test.)Among its more recent developments is a mobility testing system for LTE operators that, the company claims, is capable of "generating city-scale application and attack traffic over mobile infrastructure, from the handset and tower and through the backhaul Evolved Packet Core." BreakingPoint showed off that application at the 4G World trade show in Chicago last October.Why this matters Testing the security capabilities of fixed-line and wireless networks is becoming even more important as the number of potential threats grows and as service providers start to roll out LTE and cloud-based services.Ixia will gain additional security know-how, customers and profitable revenues from the acquisition, making it a positive, and affordable, move for the company, which only recently acquired network monitoring expert Anue Systems.
SPIT Bits: Job Cuts in Hard Times 
The mobile device sector might be attracting the job-cut headlines currently as pressures mount at Nokia Corp. (NYSE: NOK) and Research In Motion Ltd. (RIM) (Nasdaq: RIMM; Toronto: RIM), but the Service Provider Information Technology (SPIT) sector is also feeling the heat of reduced carrier capex and project delays. (See RIM Delays BlackBerry 10 Phones 'Til 2013, More Job Cuts at RIM and Nokia Cuts 10,000 Jobs, Restructures.)•Canadian test gear and service assurance software specialist EXFO Inc. (Nasdaq: EXFO; Toronto: EXF) is cutting 100 jobs and reducing some "discretionary spending" to find US$9 million in annual savings after its fiscal third-quarter revenues fell 12 percent year-on-year to $59.5 million. A combination of lower sales and reduced gross margins -- 60.4 percent compared with 64.2 percent a year ago -- resulted in a net loss of $3.9 million for the three-month period that ended May 31. The staff cuts, which will leave the company with about 1,700 employees, will result in a one-time cost of about $3 million, much of which will be booked during the current fiscal quarter. EXFO, which saw its share price dip 6 percent to close at $4.99 Friday, expects trading conditions to improve during the second half of the calendar year and believes its sales dip is the result of project delays rather than cancellations. (See EXFO Reports $3.9M Loss in Q3, EXFO Unveils Ethernet One, EXFO Adds 100G PMD Source, EXFO Aids VoLTE Tests and EXFO Offers Apps, Tackles Burst Testing.) •Finland's Comptel Corp. (Nasdaq, Helsinki: CTL1V) is another SPIT vendor looking to reduce its cost base. As part of a plan to cut its operating expenses by €10 million ($12.7 million), it is cutting an unspecified number of OSS development jobs at its site in Norway, a move that will account for €2 million ($2.5 million) of the planned cost reductions. The company, which currently employs about 700 staff, is still expecting its annual revenues to increase by about 10 percent this year to around €84 million ($106 million), but its operating profits before one-time costs are now set to be lower than earlier predicted, at no more than 5 percent of revenues. Comptel is keen to expand beyond its traditional boundaries to find new sources of revenues and earlier this year acquired Xtract to give it a foothold in the increasingly important advanced analytics sector. (See mptel Cuts Some R&D Staff in Norway, Comptel Under the Cosh and Comptel to Buy Xtract for €3.1M.)•Although around 2,500 Convergys Information Management (IM) staff have joined NetCracker Technology Corp. following the $449 million acquisition, not everyone made the move to the NEC subsidiary. NetCracker Vice President of Strategy Sanjay Mewada confirmed to Light Reading recently that "a number" of the top managers from Convergys IM did not join the company. "That's the nature of these things. There are always overlaps and duplications but it hasn't eroded the value of the deal." (See NEC to Buy Convergys Unit for $449M and NEC Completes Convergys Unit Acquisition.)
Euronews: Vodafone Talks Tough on Tax
Vodafone Group plc (NYSE: VOD), Etisalat and Emirates Integrated Telecommunications Co. (du) help start the week in today's helping of EMEA headlines.•Vodafone CEO Vittorio Colao has been using this interview with The Sunday Telegraph to defend his company against allegations of dubious tax practices, implying that the sums it had to pay to the U.K. government for spectrum are in themselves a form of tax, so it can hardly be blamed if it seeks to minimize what it subsequently pays in corporation tax. Separately, the Financial Times reports (subscription required) that in the light of tough trading conditions the mobile giant is reviewing its sports and events sponsorships, the most high-profile of which is its backing of the McLaren Formula 1 team. (See Vodafone Defends Its Tax Record.)•Is the duopoly of mobile operators Etisalat and Du in the UAE living on borrowed time? Citing Emarat Al Youm, Telecompaper reports (subscription required) that new operators could be allowed in from 2016.•In South Africa, the ruling ANC party has been discussing the possible re-nationalization of Telkom SA Ltd. (NYSE/Johannesburg: TKG), the ailing fixed-line operator, reports Reuters. Last month Telkom declined a US$385 million offer from South Korea's KT Corp. for a stake in the carrier.•Danish operator TDC A/S (Copenhagen: TDC) has changed its CEO, replacing Henrik Poulsen with former IBM Corp. (NYSE: IBM) man Carsten Dilling. (See TDC Names New CEO.)•Swiss wholesaler Netstream has chosen Edgeware AB 's Distributed Video Delivery Network (D-VDN) as the platform for its IPTV services, which it supplies to various domestic rators. (See Edgeware Wins Swiss IPTV Deal.)
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