AUSTIN, Texas – NetSolve Inc., a provider of network and security management services, went public September 29, offering 3.7 million shares at $13 apiece. The company’s stock priced at the high end of its $11 to $13 filing range.
Underwritten by BancBoston Robertson Stephens and Thomas Weisel Partners, the initial public offering left 13.4 million shares of stock outstanding.
Venture backers included New Enterprise Associates, Gateway Venture Associates, Southwest Enterprise Associates, Fostin Capital Associates and Sequoia Partners. Selling shareholders collectively unloaded 170,000 shares of stock, 1,024 of which were sold by Sequoia.
NetSolve allows clients to outsource activities related to the design, implementation, management and security of their computer networks. The company’s management and security devices are designed to increase network reliability and up-time, reduce network costs and simplify migration to new technologies.
The company plans to use the expected $41.8 million generated from the IPO to increase capitalization, financial flexibility and visibility in the marketplace, provide a public market for its common stock, facilitate future access to public equity markets and to provide liquidity for existing stockholders. The company also will use the proceeds for general corporate purposes, including working capital and possible acquisitions or investments in complementary businesses and technlogies.
NetSolve was profitable in 1997 and 1999, earning $10.3 million and $952,000, respectively. The company lost $2.2 million in 1998.
Joel Adams, president at Fostin, joined the company’s board of directors in December 1989. C. Richard Kramlich, co-founder and a general partner at New Enterprise, joined the board in April 1991. John McCarthy, a general partner at Gateway, followed in August 1991. H. Leland Murphy, an employee of Southwest, was a member of the board from November 1988 to April 1991 and was re-elected in March 1995. Howard Wolfe, managing general partner at New Venture, joined in October 1988.
NetSolve – Selected Financial
(in thousands, except per share data)
Year Ended March 31 Three Months Ended June 30
1997 1998 1999 1998 1999
Total revenue 6,316 14,523 26,716 5,562 9,076
Net income 10,295 -2,226 952 -245 1,901
Net income per share -1.75 -1.76 -0.51 -0.27 0.38