Ixia to acquire Catapult Communications

Ixia has announced that it has signed a definitive agreement with Catapult Communications Corporation, under which Ixia will acquire Catapult for $9.25 per share in cash. The transaction is valued at approximately $105 million, or $63 million net of Catapult’s cash and investments. The acquisition is expected to close in the third quarter.

Catapult’s 3G and 4G wireless networking test solutions are an excellent complement to Ixia’s complete line of IP performance test systems and service verification platforms. With this acquisition, Ixia will be able to provide a single source solution for testing converged multiplay IP services over wireless and wireline networks to new and existing customers, specifically telecom equipment manufacturers and global service providers. Catapult’s advanced wireless test systems deliver superior high-performance solutions for hundreds of protocols and variants, including LTE, IMS, WiMAX, CDMA, VoIP, GPRS and GSM.

Atul Bhatnagar, president and CEO of Ixia, stated: “We are at an inflection point where today’s advanced communications are quickly merging into a single, seamless delivery network that combines fixed and mobile communications. This acquisition will position Ixia as a leading source for end-to-end IP test solutions for wireline and wireless networks. In addition to immediately expanding our addressable market and making us a leader in 3G and 4G wireless testing, the acquisition will help drive top and bottom line growth.”

Dick Karp, chairman and CEO at Catapult, added: “Ixia and Catapult bring together complementary strengths in IP and wireless communications testing in terms of technology leadership and product portfolio. By combining Ixia’s multiplay IP test capabilities with Catapult’s wireless test expertise, Ixia will be able to offer the market a single, powerful solution that leverages both companies’ technologies, customers, and global distribution channels to accelerate growth and innovation in key markets.”

The acquisition will be conducted by means of a tender offer for all of the outstanding shares of common stock of Catapult, followed by a second-step merger. The board of directors of Catapult has unanimously recommended that the stockholders of Catapult accept the offer, and Dick Karp and Nancy Karp have entered into a support agreement to tender their shares, which represent approximately 37% of shares outstanding.

The offer, which is expected to commence within the next ten business days, will be subject to customary conditions, including acceptance of the tender offer by the holders of a majority of Catapult’s outstanding shares and regulatory approvals (including antitrust compliance).

This transaction is expected to be accretive to Ixia’s non-GAAP earnings as early as the fourth quarter of 2009. Non-GAAP earnings exclude stock-based compensation, amortization of acquired intangible assets, and other non-recurring charges, net of the applicable tax effects.

Thomas Weisel Partners LLC is acting as financial advisor and Bryan Cave LLP is acting as legal counsel to Ixia.