SAN JOSE, Calif. – Alteon WebSystems Inc., a provider of Internet infrastructure solutions, went public September 24, offering 3 million shares at $19 apiece. The company’s stock priced at the high end of its $17 to $19 filing range.
Underwritten by Lehman Brothers, BancBoston Robertson Stephens and Thomas Weisel Partners, the initial public offering left 37.3 million shares outstanding.
There were no selling shareholders. Venture backers included Matrix Partners and Sutter Hill Ventures.
Alteon makes products that speed up servers to feed data into networks and Web sites. The company provides Web traffic management and networking infrastructure solutions through its Web data center products, which include switches, server adapters, software and semiconductors.
Alteon plans to use the expected $40.8 million generated from the IPO for general corporate purposes, including the expansion of sales and marketing capabilities, product development and potential acquisitions. The company will also use the proceeds to increase its capitalization and financial flexibility, to create a public market for its common stock and to facilitate access to public equity markets.
Alteon has never been profitable, losing $10.8 million in 1998 and $12.5 million in 1999.
Tench Coxe, a managing director at Sutter Hill, and Andrew Verhalen, the general partner at Matrix, both joined the company’s board of directors in May 1996.
Alteon WebSystems – Selected Financial
(in thousands, except per share data)
March 18, 1996 (inception) Year Ended June 30
to June 30, 1996 1997 1998 1999
1997 1998 1999
Total revenue 178 13,572 26,254
Net loss -274 -7,785 -10,806 -12,543
Net loss per share -0.48 -5.15 -2.18 -1.65