Veraz IPO Comes in Low
When it first filed for a listing on Nasdaq back in October 2006, Veraz was hoping to raise as much as $115 million from the public markets. Now, though, it says it will sell 9 million shares (about 22.5 percent of its total stock) at $8 dollars each to raise $72 million, with a further 1.35 million shares available for any over-allotments, which would raise a further $12.15 million. (See Veraz Files for $115M IPO.)
In March, Veraz filed a form with the Securities and Exchange Commission (SEC) that said the initial price of the stock "is expected to be between $10.00 and $12.00 per share."
That slide in valuation spells bad news for ECI Telecom Ltd. , which owns about 40 percent of Veraz. On March 20, ECI said it expected to pocket $55 million to $70 million from the IPO. (See Veraz May Boost ECI.)
Now, though, ECI says that, at $8 per share, it expects to bag just $35 million to $48 million from its share of the initial listing. Despite that shortfall, ECI's share price dipped only 3 cents, less than half a percent, to $8.38 this morning.
After today's IPO, ECI will still hold a 27.5 percent stake in Veraz.
Veraz's latest filing shows that in 2006 the company reported revenues of $99.6 million, up from $76.2 million in 2005. Last year was also the first in which Veraz generated more revenues from its VOIP gear than its legacy digital circuit multiplication equipment (DCME): VOIP sales hit $47.3 million, up from $24.5 million a year earlier, while DCME revenues dipped to $38.6 million from $41.7 million in 2005.
Veraz still lost money in 2006, though. The net loss was $13.9 million, slightly better than 2005's $14.3 million deficit.
The most recent other VOIP equipment IPO was that of session border controller vendor Acme Packet Inc. (Nasdaq: APKT), which listed its shares in October 2006. It sold its stock at $9.50, well above its initial target range, and the shares jumped to $15 on the first day's trading. Acme's share price is currently $14.53.
— Ray Le Maistre, International News Editor, Light Reading