NetScout Systems Inc. –

WESTFORD, Mass. – NetScout Systems Inc., a maker of software for tracking applications throughout a network, went public August 12, offering 3 million shares at $11 apiece. The company’s stock priced at the low end of its $11 to $12 filing range.

Underwritten by Deutsche Banc Alex. Brown, Bear, Stearns & Co. Inc. and Dain Rauscher Wessels, the initial public offering left 25.6 million shares outstanding.

Venture investors included Egan-Managed Capital, Technology Enabling Company, TA Associates Inc., and Greylock Management Corp. There were no selling shareholders.

NetScout tracks and provides information on the flow of software applications, such as e-mail, order entry and Web-based applications, across a company’s underlying computer network. The company uses data collection products to analyze and present software performance to its clients.

NetScout plans to use the expected $29.9 million in proceeds from the IPO to obtain additional working capital, create a public market for common stock, increase visibility in the marketplace, facilitate future access to public markets and provide liquidity to existing stockholders. The remainder will be used for general corporate purposes. The company also may use a portion of the proceeds to acquire or invest in complementary businesses or products and obtain the right to use such technologies.

The company always has been profitable, earning $5.4 million in 1998 and $10.3 million in 1999.

Joseph Hadzima, Jr., a managing director of Technology Enabling Co., joined the company’s board in July 1998. Richard Egan, a founder of Egan-Managed Capital Corp., and Kenneth Schiciano, a principal of TA Associates Inc., both joined in January.


NetScout Systems – Selected Financial(

in thousands, except per share data)

Year Ended March 31 Three Months Ended June 30

1995 1996 1997 1998 1999 1998 1999

Total revenue 5,877 15,683 30,648 42,829 67,551 15,263 19,071

Net income 555 2,003 5,918 5,432 10,272 2,094 3,134

Net income per share 0.03 0.11 0.31 0.28 0.55 0.11 0.22