Ixia Buys RAN Test Specialist

IP test-equipment house Ixia (Nasdaq: XXIA) is hoping to get into the radio network with the pending acquisition of Catapult Communications Corp. (Nasdaq: CATT), announced well after market close yesterday.

The deal would have Ixia paying $9.25 per share in cash, versus Catapult's stock price of $8.11 as of last night. (See Ixia to Acquire Catapult.) That makes it a $105 million offer, or $63 million if you subtract the cash Catapult holds. The deal is expected to close in June or July.

Ixia has already built up a portfolio that tests the edge and core of 3G and 4G networks, so an expansion into the radio portion -- the base station or eNodeB -- seemed logical, according to Ixia CEO Atul Bhatnagar.

The company has some products for wireless radio testing, but "this is our big foray" into the radio side of things, Bhatnagar says. The company's main plans for Catapult involve the next-generation network -- Long-Term Evolution (LTE) in particular -- but Catapult would continue selling its 3G and older technologies after the acquisition.

Ixia intends to keep all 200 or so of Catapult's employees, bringing the company's headcount to more than 1,000.

Ixia expects Catapult to add to non-GAAP net income by the fourth quarter. Catapult did incur losses in fiscal 2007 and 2008 -- losses of $6 million, or 47 cents per share, on revenues of $37.9 million in the 2008 case. But it's climbed back to profitability. For its second quarter, which ended March 31, Catapult reported net income of $1.1 million (10 cents per share) on revenues of $12.1 million.

— Craig Matsumoto, West Coast Editor, Light Reading