Last year was reflective of the ongoing consolidation in the network and device testing industry. Although there weren’t necessarily blockbuster acquisitions on the order of NetScout’s $2.6 billion Danaher communications acquisition in 2015, 2016 did host a series of smaller, ongoing test and measurement acquisitions that were often of privately held companies.
Over the course of the year, notable test and measurement acquisitions included:
Spirent Communications bought Testing Technologies, in which it acquired a majority stake for 2 million euros back in 2014. As part of the deal to acquire the majority stake, Spirent had an option to buy out the rest of the company, which expired on March 31, 2016; the acquisition was announced March 30. According to Spirent’s half-year report, the cash consideration to pay for the minority stake was $2.6 million.
Canadian test company Averna bought European company Test and Measurement Solutions in March 2016 for an undisclosed sum. In announcing the purchase, Averna said the “acquisition increases Averna’s global reach as well as provides a strong local presence in Europe, enabling Averna to enter this market with a well-established and respected solution provider while giving it a springboard for further European deployments. In addition, T&M Solutions brings unique expertise in semiconductor testing, vision inspection systems and precision assembly to complement Averna’s existing solutions and industry strengths.”
Teledyne LeCroy made two acquisitions around protocol testing in the spring of 2016. The company agreed to buy Frontline Test Equipment, which focused on protocol testing for Bluetooth and Wi-Fi; and soon thereafter also bought Quantum Data, a specialist in HDMI and serial digital interface signal generators, and protocol analyzers along with other digital video testing technologies. Neither deal had financial terms disclosed.
Also in April, MTS announced its purchase of sensor production company PCB Group for $580 million. MTS plans to combine PCB into its own sensors business with an eye toward more complete test and development services for internet of things applications.
In July, Averna followed up with the purchase of North Carolina-based Nexjen Systems for an undisclosed sum. Nexjen was an 11-year-old division of Jenkins Electric Company, started to serve test customers in the southeastern U.S. and Averna said the purchase was intended to boost its presence in the region.
Also in July, ElectroRent announced it was being acquired by Platinum Equity for $323.4 million. The transaction did draw some scrutiny from investors, but ultimately the sale was completed in August with a price tag of $382 million.
One of the largest companies with a testing component was formed in July, with the spin off of Fortive from Danaher. Fortive includes the Tektronix, Fluke and Keithley brands and in two quarters of reporting, has already generated $3.2 billion in revenue. (See the recent top 12 test and measurement companies list here.)
In August, Ascom announced the sale of Ascom Network Testing to InfoVista, which itself had recently been acquired by private equity firm Apax Partners. Apax has said its goal for InfoVista is to establish the company “as the undisputed world leader in the network performance orchestration software market” and that the purchase of TEMS was “a significant step towards that goal.”
In announcing the acquisition, InfoVista reported the transaction would nearly double the company in size, with revenues of about $200 million, and “improve the group’s global presence, particularly in the USA and in Asia.” The deal was finalized in October.
Anritsu bought channel emulation specialist Azimuth Systems in September for an undisclosed sum and plans to turn the company into an Anritsu subsidiary. This expanded Anritsu’s overall test portfolio, and Anritsu said it will integrate Azimuth’s channel emulation capabilities across Anritsu product lines.
Azimuth Systems was privately held; terms of the deal were not disclosed (pdf). Anritsu called channel emulation and the ability to generate controlled radio frequency environments in general “indispensable in lab-based testing” and added that Azimuth’s radio propagation technology “is a necessary part of evaluation and verification in research and development as well as for conformance test for mobile communications.”
EXFO purchased optical radio frequency testing technology from Absolute Analysis in October, in a cash and stock transaction of $8.35 million. EXFO promptly began leveraging the new RF over common public radio interface technology in its FTB-1 Pro test platform for locating RF interference in fiber-based mobile networks.
In November, ElectroRent – now officially part of Platinum Equity – bought Microlease, a competitor in the test equipment rental and distribution space, for an undisclosed sum. The transaction is expected to close in the first quarter of 2017.
What else is ahead for this year? Rohde & Schwarz already announced the purchase of French application security company DenyAll, part of its ongoing aim to turn itself into a European cybersecurity powerhouse. Meanwhile, Reuters reported in mid-December that Ixia was working with an investment bank to explore a sale, which the company did not confirm but that still caused a nearly 20% jump in the company’s stock price – though it has since fallen back to pre-rumor levels.
Is there a testing acquisition from 2016 that you think belongs on this list? Let me know at [email protected].
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