LR Picks Leading Lights IPO/M&A Finalists

With so many telecom markets heating up -- IPTV, VOIP, fixed/mobile convergence -- it's an exciting time for deals. Plenty of candidates big and small could fill the finalist ranks for the Leading Lights Awards category of Top IPO or M&A Candidate.

The telecom IPO market didn't sizzle in 2005, but plenty of eligible companies -- including a couple of 2004 Leading Lights finalists -- are poised take their shot in 2006. And mergers are back, just look at 's (Nasdaq: CSCO) blockbuster bid for Scientific-Atlanta Inc. (NYSE: SFA). (See Cisco to Acquire Scientific-Atlanta.)

So, what is it Light Reading editors and Heavy Reading analysts looked for? This award aims to peg the private company that most clearly has the management, products, and financial stability to launch a successful IPO or be acquired on its own terms within the next 12 months. In particular, the company needs to have significant double-digit millions in revenue and be in a position to break even by the end of 2006.

The Leading Lights Award winners will be announced at an Awards Dinner after The Light Reading Telecom Investment Conference in New York City on December 14.

Here are the finalists, in alphabetical order:

  • Airgo Networks Inc.

    One of the leading IPO contenders in the wireless LAN world, Airgo has pioneered high-speed 802.11 using a multiple antenna technology called MIMO. Having raised $132 million in VC funding, it only took the company seven weeks to ship its 1 millionth chip and announce its third-generation silicon. Earlier this year, CEO Greg Raleigh even talked to Unstrung about the prospects for an 2006 IPO. The firm has so far raised $132 million in VC funding. (See AirGo's SOHO Go-Go, Airgo Hits Million Mark, Airgo Speeds WLAN, and Airgo Plots Possible IPO.)

  • BigBand Networks Inc.

    Last year's winner is eligible again after not going public so far in 2005. Why give BigBand another go? Because the signs of success are still there: After $100 million in financing, the IP video company has lined up nearly all the top U.S. cable operators as customers, and it's continuing to expand its reach. And word has it that BigBand has signed a Tier 1 telephone operator, bigger than previously announced telco customer (Nasdaq: SURW). (See BigBand Plays for a Telco Tier 1 .)

    BigBand officials still talk about an IPO, but don't rule out acquisition. Cable got hotter in recent weeks, thanks to the Cisco/Scientific-Atlanta deal, a move expected to stir more M&A interest in broadband TV. (See Expect More IPTV M&A.)

  • Amid the crowd of VOIP equipment players, Broadsoft stands out. Founded in 1998, the company has tallied 135 customers including (NYSE: BLS), , (Nasdaq: MCIP), and T-Systems Inc.. And it's trying to become an early leader in IP Multimedia Subsystem (IMS) technology, using the architecture to push identical applications for the wired and wireless networks. While not divulging specifics, Broadsoft says its revenues are set to grow 80 to 90 percent this year, with profits -- yes, it's profitable -- likely growing 20 to 30 percent.

    is one of the few other VOIP players poised for an IPO, but Broadsoft is presumed to have more customers. (See Broadsoft Claims 100th Customer and BroadSoft.) Both companies want to go public in 2006, but the available evidence gives Broadsoft the edge.

  • Calix Networks Inc.

    How could Calix not get nominated, considering it's a fixture on the Light Reading Top Ten Private Companies list? (See Calix Networks, Calix Networks, Calix Networks, and Calix.)

    CEO Carl Russo has said he's not dying to take the company public. But he's also said that his number one reason to go public would be to gain the acquisition currency to make deals. (See Full Transcript of LRTV’s Interview With Carl Russo, CEO, Calix and IPOs Happen: Carl Russo Speaks). We also think Russo might want to get the IPO monkey off his back, since following the deal to sell his last company, Cerent, to Cisco for $7B, many folks have asked why they didn't go pubilc. Meanwhile, the access equipment company keeps adding to its resume: Calix recently bagged (NYSE: S) as a customer and got its thumb into the broadband fiber pie with the proposed purchase of Optical Solutions Inc. (See Nortel, Calix Get Access at Sprint and Calix to Buy OSI.) Maybe it wants to grow faster? If so, IPO could be the way to do so.

  • Force10 Networks Inc.

    Another Light Reading Top 10 favorite, Force10 has more than arrived. The lone 10-Gbit/s Ethernet startup, Force10 has ensconced itself at the high end, courting major enterprises and the supercomputing crowd. With Google (Nasdaq: GOOG), Yahoo Inc. (Nasdaq: YHOO), and ESPN as its top three customers, visibility doesn't seem to be a problem. (See Google's Own Private Internet.)

    With 275 employees and more than $300 million in funding, Force10 isn't a likely acquisition candidate. Having raised one (last?) funding round, Force10 is yet another player hoping for a 2006 IPO, and its projected $60 million in revenues this year suggest it has the heft to pull it off. (See Force10 Takes $40M, Talks IPO and Force10 Revs Revenues.)

    — The Staff, Light Reading

  • For more information on the Leading Lights Awards, click here.

  • For more information on The Light Reading Telecom Investment Conference, click here.

  • Pete Baldwin 12/5/2012 | 2:52:19 AM
    re: LR Picks Leading Lights IPO/M&A Finalists Who's your pick? Or did we miss one?
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