Network testing firm Ixia has purchased Santa Barbara-based Communication Machinery Corp. for approximately $4 million in cash. As a result of the purchase, Ixia has rolled out a new line of network testing tools in the wireless LAN market, a sector of the industry that had previously gone untapped by Calabasas-based Ixia. Analysts are bullish on the deal, claiming that the high margin products produced by CMC will help boost Ixia’s revenues and profits. “The acquisition will help the company further broaden its product line and help accelerate revenues and earnings growth over the next several quarters. It coincides with the acquisition strategy that Ixia outlined a year and a half ago. It will only help them take market share from their competitors,” Ryan Hutchinson, an analyst from W.R. Hambrecht & Company said. Last week, Ixia also released strong quarterly results, claiming net income of $9.8 million, or $0.14 per diluted share for the second quarter of 2005, a 175 percent increase when compared to net income of $3.5 million, or $0.06 per diluted share, for the second quarter of 2004. Ixia reported record revenues of $41.3 million, which represents a year over year increase of 54 percent from the second quarter of last year. Needham & Company analyst John Harmon, who maintains a “strong buy” rating on the stock, spoke effusively about the company. “This is a very profitable and rapidly growing company. It is a high quality firm and the last three quarters they’ve grown year over year. The company has a strong financial position and balance sheet,” Harmon said.
Purchase Will Broaden Ixia’s Line of Products