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Ethernet equipment

ANDA Files for $86M IPO

Our sources were right. (See Sources: ANDA Preps IPO.)

Ethernet access equipment firm ANDA Networks Inc. has filed an S-1 form with the Securities and Exchange Commission (SEC) detailing its plans to raise $86.25 million from a public listing of its stock on the Nasdaq exchange. No timing or proposed share price details were published.

The filing marks a hectic week for the vendor, which makes Ethernet equipment that's used for business access services and wireless backhaul. It has just landed a significant deal, through OEM partner Ciena Corp. (NYSE: CIEN), to be a supplier for BT Group plc (NYSE: BT; London: BTA)'s 21CN next-generation network project. (See Ciena Takes ANDA Into 21CN.)

That deal should help ANDA diversify its revenue stream, which is heavily reliant on a small number of leading customers at present, most particularly Verizon Communications Inc. (NYSE: VZ).

According to details filed in the S-1 form, ANDA has its EtherTone products deployed in 21 carrier networks as of September 30. Those carriers include BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), Level 3 Communications Inc. (NYSE: LVLT), MTS Allstream Inc. , Rogers Wireless Communications Inc. (NYSE: RCN; Toronto: RCM), and XO Communications Inc. , as well as Verizon.

However, the majority of the vendor's sales come from just a few of those operators. In the nine months to September 30, 2007, Verizon, XO Communications, and MTS Allstream generated 87 percent of ANDA's revenues, which totaled $19.4 million, with Verizon accounting for a whopping 71 percent, or $13.8 million, by itself.

ANDA believes that "a limited number of our key customers will continue to represent a substantial percentage of our revenue for the foreseeable future," and notes that "the loss of, or reduction in orders from, any of these key customers, especially Verizon, would have a material adverse impact on our revenues and operating results."

In that nine-month period to September 30, ANDA reported a net loss of $0.7 million, a considerable improvement from the same period in 2006, when it reported a net loss of $2.8 million from revenues of $6.9 million.

The company sells directly to operators and through its OEM deal with Ciena and a reseller relationship with Nortel Networks Ltd. . (See Anda, Nortel Team Up.)

It also relies on Alcatel-Lucent (NYSE: ALU) for the installation and support of its products at many of its customers, saying any breakdown in that relationship would "adversely affect our customer relationships." (See Lucent to Support ANDA.)

ANDA believes its addressable market (systems for business broadband and wireless backhaul) will grow from $582 million in 2007 to $3.4 billion by 2010.

— Ray Le Maistre, International News Editor, Light Reading

braver2002 12/5/2012 | 3:35:34 PM
re: ANDA Files for $86M IPO Can you give me a example.
I will see how it is far superiror to ANDA.
braver2002 12/5/2012 | 3:35:34 PM
re: ANDA Files for $86M IPO You have been in Ciena for 7 months.
How did you feel.
Since they buy "world wide packet" , you must be useful for them.
I can't understand whether it is true that they are very bad to companies that do anything other then optics
digits 12/5/2012 | 2:57:02 PM
re: ANDA Files for $86M IPO That's a LOT of revenues coming from one customer, albeit a big one.
BT will likely give it a new stream, but wouldn't investors feel a bit happier if the spondoolics were a bit more spread out?
OSXman 12/5/2012 | 2:57:02 PM
re: ANDA Files for $86M IPO There is no solid information on valuation in the S-1, but there were 26mm pre-money shares outstanding. I will guess that they are talking about an $8-10 range because anything less would be a little odd. That gives them an IPO enterprise value perhaps in the range of $250mm based upon $18mm in revenues for the first three quarters of the year.

Compate this with ADVA which has an enterprise value of $267mm based upon trailing twelve month revenue of $345mm. ADVA has a better EAD and is the primary supplier to 21CN. ANDA is a secondary supplier that was just named. ADVA hasn't executed well this past year, but they are profitable. ANDA is not.
wwpp4u 12/5/2012 | 2:57:00 PM
re: ANDA Files for $86M IPO cien try to buy anda and now they try to buy us. i hope they do not buy us as they are very bad to companies that do anything other then optics. Spoke to some of there engineers and did i get scared, please don;t let this happen. us is world wide packet
bollocks187 12/5/2012 | 2:56:59 PM
re: ANDA Files for $86M IPO This could be the start of mini-bubble or a disastor waiting to happen. If Anda can go public on $19M then a whole generation of startups can as well. Many telecom companies are struggling as public entities and they are far superiror to ANDA.
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