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Video hardware

Envivio Goes for IPO Glory

Video processing specialist Envivio Inc. (NASDAQ: ENVI) intends to raise about US$69 million in an initial public offering (IPO) as the white-hot TV Everywhere market gets even hotter.

San Francisco-based Envivio announced the filing of its S-1 registration statement with the Securities and Exchange Commission (SEC) Monday, and is chasing the IPO following a record fiscal year. For the year ended Jan. 31, 2011, the company had revenues of $30 million, almost doubling the previous year's total of $16.28 million. It's seeking the "ENVI" ticker. (See Envivio Chases Its IPO .)

But the 10-year-old company, which makes encoders, transcoders and network media processors to help deliver IP video to TVs, PCs and other mobile devices, still hasn't turned the corner. It recorded a full year 2011 loss of $2.48 million, narrowed from a year-ago loss of $9.17 million. It ended that period with no outstanding debt and total losses of $79 million.

Envivio's filing didn't identify its major customers, but did note that sales to its 10 largest accounted for about 63 percent of total revenues. Last week, it announced a deal with Prisa TV of Spain, and, in the U.S., has been connected to Sezmi Corp.

The company, whose roots are traced to Orange (NYSE: FTE), relies heavily on the international market, as 77 percent of its full-year 2011 revenues came from outside the U.S., compared with 92 percent the previous year. Envivio ended the period with $10.01 million in cash and $26.75 million in total assets.

Envivio didn't specify when it would initiate the IPO, but claims it doesn't need the cash right away. The finances it has on hand or available through credit will get it through "at least the next 12 months," the company said.

Ahead of RGB
Some of Envivio's key competitors include Harmonic Inc. (Nasdaq: HLIT), RGB Networks Inc. and Inlet Technologies Inc. , which was recently bought by Cisco Systems Inc. (Nasdaq: CSCO). Of that group, only RGB has yet to finalize some sort of the exit, but it has had IPO ambitions for years. (See Cisco Paints Inlet Into Its Videoscape and RGB Raids Envivio .)

And it still wants to pull the trigger ... someday. "We're still planning to be ready to IPO by the end of 2011 and things are looking good," RGB Chairman and CEO Jeff Graham told Light Reading Cable in an emailed statement, noting that his company was profitable in the first quarter of 2011 and that the company has shipped more than $200 million in product since its founding in 2001. (See RGB Relights Its IPO Fire .)

But Graham admits that the timing of Envivio's filing caught him a bit off guard.

"However, while the IP video market is hot, it's not entirely clear yet how big this market is and how it will roll out," Graham added. "We need to fully answer these questions at the time of our IPO for a truly successful offering, which is why we're surprised that Envivio is going public at this time as the market data isn't strong enough for confident predictions."

But Graham's still rooting for Envivio to get a "big valuation," because what's good for a competitor, in this instance, may also bode well for his company.

— Jeff Baumgartner, Site Editor, Light Reading Cable



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