By Liana B. Baker and Greg Roumeliotis
(Reuters) - Keysight Technologies Inc <KEYS.N>, a provider of software and equipment to the electronics and wireless communications industries, is in talks to acquire U.S. data technology company Ixia <XXIA.O>, according to people familiar with the matter.
A deal would come as the increasing volume of data traffic flowing through social media, smartphones and cloud computing tests the resilience and integrity of networks, making Ixia's equipment and applications more popular with its clients and coveted by its peers.
Keysight is not the only bidder participating in an auction for Ixia, and there is no certainty that its bid will prevail, the people said this week. The negotiations are expected to continue for several more days, the people added.
The sources asked not be identified because the negotiations are confidential. Ixia, which has a market capitalisation of $1.4 billion, declined to comment. Keysight did not immediately respond to a request for comment.
Based in Calabasas, California, Ixia makes equipment that monitors and tests networks so enterprise customers can have their data travel smoothly without bottlenecks. Its customers include the world's largest networking gear maker, Cisco Systems Inc.
Ixia also makes hardware that helps secure networks. Its chief executive officer said on its latest earnings conference call that 35 percent of its total business was tied to security products.
Ixia was founded by Errol Ginsberg in 1997 and went public in 2000, as internet traffic started to increase.
Ixia's former chief executive, Vic Alston, resigned in 2013 for misstating academic credentials and other details such as his age and job history, the company said at the time. The company recruited a senior networking executive from Hewlett Packard, Bethany Mayer, to be its chief executive in 2014.
Ixia generated revenue of $123.9 million in the third quarter, down from $125.9 million in the same quarter a year earlier.
Based in Santa Rosa, California, Keysight helps companies test products that have electronic components. It has a market capitalization of $6.3 billion.
Reuters first reported last month that Ixia was exploring a sale.
(This story corrects Ixia CEO surname to Mayer from Meyer in eighth paragraph.)
(Reporting by Liana B. Baker in San Francisco and Greg Roumeliotis in New York; Editing by Cynthia Osterman)