SolarWinds Outlines IPO
March 24, 2008
SolarWinds Inc., a venture-backed network management software company, filed to go public Friday, March 21, with an initial target of raising as much as $250 million.
The Austin, Texas, company, which Bain Capital Integral Investors LLC and Insight Venture Partners recapitalized in December 2005, gave no details as to a target offer price or shares to be sold in its initial prospectus filed with the Securities and Exchange Commission.
J.P. Morgan Securities Inc., Goldman, Sachs & Co. and Lehman Brothers Inc. are joint bookrunners for the offering, while UBS Securities LLC and Thomas Weisel Partners LLC are co-managers, the company said.
SolarWinds intends to use a portion of the proceeds to repay debt, as well as for working capital and general corporate purposes, which could include licensing deals or acquisitions. The company said it had Ebitda of $35.4 million for 2007, up from $27 million a year earlier.
The company lists as shareholders: Bain Capital Integral with 25.5%; Bain affiliate BCV Co-Invest SW LP with 6.1%; Insight Venture affiliates with 31.6%; and affiliates of founder Donald C. Yonce with 28.4%. Austin Ventures is another selling stockholder and holds a 3.4% stake, according to the prospectus. Details about the number of shares to be sold were not revealed in the initial filing. SolarWinds CEO Michael Bennett also owns nearly 5.5% of shares. The company had nearly 5.1 million shares outstanding as of March 14.
Among risk factors, SolarWinds lists a lawsuit a former employee brought against the company and founder, claiming he is a co-architect of the company's software and seeking an accounting of royalties related to sales and unspecified damages.
Paul Tobias and J. Robert Suffoletta of Wilson Sonsini Goodrich & Rosati are issuer's counsel; Fenwick & West LLP's Laird Simons and Robert Freedman are advising the underwriters.
The company plans to apply to list on the New York Stock Exchange under the symbol SWI.
