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Arbinet Aims for $64M IPO

Light Reading
News Analysis
Light Reading
11/24/2004

Online capacity trader Arbinet-thexchange Inc., one of the few survivors of the bandwidth exchange explosion of the late 1990s, hopes to raise up to $64 million from its planned IPO on Nasdaq.

In a filing with the Securities and Exchange Commission (SEC), Arbinet said more than 6.5 million shares will be sold at $14 to $16 each. No proposed date for the listing has been revealed, and the company says it can't add any detail not included in the filing.

Arbinet, which will trade under the symbol ARBX, is selling 4 million shares, which would net it $64 million at the top end of the price range. A price of $16 per share would value the company at about $384 million.

Arbinet plans to use the proceeds to pay off about $4 million in debt and for general corporate purposes.

In addition, numerous institutional and individual stockholders are collectively selling 2,535,405 shares and will retain the proceeds. Those shareholders include J.P. Morgan Chase & Co. and BancBoston Ventures.

In addition, those stockholders might sell an additional 980,310 shares to the five underwriters, which include Lehman Brothers and Merrill Lynch & Co. Inc.

Arbinet first announced its IPO intentions in July, after which it acquired the IP transit business of Band-X Ltd. for $4 million (see Arbinet Files for IPO and Band-X Exits IP Market). Arbinet recently settled a copyright infringement lawsuit with Nortel Networks Ltd. (NYSE/Toronto: NT). (See Arbinet Settles Nortel Lawsuit.)

Arbinet recorded revenues of $34 million and a net loss of $5,000 for the whole of 2003 but is due to have a much better 2004. In the first nine months of this year, the company registered revenues of $32.2 million and net income of $1.9 million.

— Ray Le Maistre, International News Editor, Light Reading




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