SUNNYVALE, Calif. – Foundry Networks Inc., a supplier of networking products for enterprises and Internet service providers, went public September 28, offering 5 million shares at $25 apiece. The company’s stock priced above its $22 to $24 filing range.
Underwritten by Deutsche Banc Alex. Brown, Merrill Lynch & Co. and J.P. Morgan & Co., the initial public offering left 55.6 million shares outstanding.
There were no selling shareholders. Venture backers included Crosspoint Venture Partners, Institutional Venture Partners, Accel Partners and VantagePoint Venture Partners.
Foundry Networks designs, develops, manufactures and markets a comprehensive suite of products that enable clients to build and maintain efficient, high performance networks.
The expected $115.3 million generated from the IPO will be used to increase equity capital, create a public market for common stock, facilitate future access to public equity markets and to provide increased visibility in the marketplace. A portion of the proceeds will be used for working capital and for general corporate purposes, including expansion of sales and marketing, customer support, research and development, operational and administrative infrastructure and leasing additional facilities. The company also might use a portion of the proceeds to acquire or invest in complementary businesses, technologies or products.
Foundry Networks was not profitable until the six months ended June 30, when it earned $3.3 million. The company lost $4.2 million in the six months ended June 30, 1998.
Seth Neiman, a partner at Crosspoint, joined the company’s board of directors in May 1996.
Foundry Networks – Selected Financial
(in thousands, except per share data)
May 22, 1996 (inception) Year Ended December 31 Six Months Ended June 30
to December 31, 1996 1997 1998 1998* 1999*
Total revenue 3,381 17,039 4,203 39,487
Net income -2,013 -9,007 -9,352 -4,230 3,274
Net income per share -0.69 0.06