Vixel Corp. –

BOTHELL, Wash. – Vixel Corp., a provider of network storage, went public October 1, offering 4.3 million shares at $18 apiece. The company’s stock priced well above its $14 to $16 filing range.

Underwritten by BancBoston Robertson Stephens, Bear, Stearns & Co. Inc. and Needham & Co. Inc., the initial public offering left 22.2 million shares of stock outstanding.

There were no selling shareholders. Venture backers included Mayfield Fund, Menlo Ventures, Western Digital Corp., AVI/Arcxel Investors, Olbright L.L.C. and Irell and Manella L.L.P.

Vixel makes interconnection products that connect computers to data storage devices in a network configuration known as storage area networks (SANs).

Vixel will use the expected $70.8 million generated from the IPO to repay debt, for working capital and for general corporate purposes, including sales and marketing, product offerings and capital expenditures. The company also might use a portion of the proceeds to acquire complementary products, technologies and businesses.

Vixel has never been profitable, losing $13.8 million in the year ended December 28, 1997 and $21.2 million in the year ended January 3, 1999.

Werner Wolfen, a retired partner at Irell & Manella, joined the company’s board of directors in July 1994. Charles Haggerty, chairman, president and chief executive officer at Western Digital, followed in March 1996.

Vixel – Selected Financial

(in thousands, except per share data)

Year Ended Six Months Ended

Dec. 29, 1996 Dec. 28, 1997 Jan. 3, 1999 June 28, 1998* July 4, 1999*

Total revenue 6,941 22,783 39,445 21,234 22,059

Net loss -17,652 -13,759 -21,233 -3,930 -9,856

Net loss per share -8.77 -2.83