Optical/IP Networks

Force10 Files for an IPO

Force10 Networks Inc. is finally going public, one year after getting acquired by Turin Networks.

Specifics such as the price range haven't been determined yet, but Force10's registration, filed with the Securities and Exchange Commission (SEC) today, lists $143.75 million as the maximum amount to be raised.

The IPO's underwriting team includes some big names: JP.MorganChase , Deutsche Bank AG , Barclays Capital , Robert W. Baird & Co. Inc. , Cowen and Co. , RBC Capital Markets , and Pacific Crest Securities Inc.

Force10 is the product of Turin acquiring the original Force10 -- we'll call it Old Force 10 -- in March 2009. Turin retained the Force10 name because it was apparently much cooler. (See Force10, Turin to Merge and Force10, Turin Play Convergence Card.)

Force10/Turin has been losing money. For the year ended September 30, 2009, it's reporting net losses of $54.6 million on revenues of $119.1 million.

Table 1: Force10 (Turin) Results
Fiscal Year (ending Sept. 30) 2007 2008 2009
Revenues ($M)
Net income (loss) ($M)
Source: Force10 S-1 filing.
2009 figures include six months of Old Force10 results. Old Force10 is not included in 2007 or 2008 figures.

Among the surprises in the S-1 filing: Old Force10 was bringing in a lot more revenue than most people believed, albeit at a money-losing clip. Revenues jumped upward in 2007, and while they didn't climb in 2008 (contrary to what officials inferred to Light Reading a year ago), they surpassed most people's estimates of $50 million to $100 million.

Table 2: Old Force10 (Old! Excludes Turin!)
Fiscal Year (ending Sept. 30) 2006 2007 2008
Revenues ($M)
Net income (loss) ($M)
Net cash used
in operating activities ($M)
Source: Force10 S-1 filing.

Force10/Turin employs 571. As expected, that's down from the 900 employees at Turin and Old Force 10 combined.

As in the case of Calix Inc. (NYSE: CALX), Force10's IPO has been a legendary creature for years. The company has raised at least $400 million in six rounds and was considered an IPO candidate as early as 2004. (See Force10 Networks Inc. and Force10 Rakes It In.)

Calix filed for its IPO in November. (See Calix Files for an IPO.)

— Craig Matsumoto, West Coast Editor, Light Reading

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