Netgear files US115 million IPO
- 14 April, 2003 12:00
Netgear, the number-two SOHO network equipment vendor behind Linksys Group, has filed an initial public offering for $US115 million. Netgear plans to trade on the NASDAQ under the ticker symbol NTGR.
The company produces a wide range of products for the small office, including Ethernet, broadband and wireless gear.
Netgear expected the SOHO networking market to grow from $US3 billion in 2002 to $US5.2 billion in 2005, according to the Securities and Exchange Commission filing.
As the wireless LAN market grows white-hot, the industry has eyed SOHO network vendors such as Linksys, Netgear and D-Link, speculating on possible buyers - but less so on the likelihood of IPOs.
Netgear is only the fourth technology company to go public this year. When Cisco recently bought Linksys, some pegged Motorola as a possible Netgear buyer.
Netgear’s revenue is growing steadily, but the company has yet to turn a profit. According to reports, Netgear lost $US9.74 million in 2002 on revenue of $US237 million compared to a loss of $US19.5 million and revenue of $US192.4 million in 2001. In 2002, the company posted operating income of $US10.6 million versus an operating loss of $US15.3 million in 2001.
This is Netgear’s second try at going public. In 2000, after the company was spun off from Nortel, Netgear filed for IPO in September, just as the market tanked.
Subsequently, it abandoned the plan in February 2001. Netgear plans to use $US20 million of the net proceeds of offering to repay its debt to Nortel, and use the rest for general corporate purposes.