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Summary:

Force10, the networking company, filed for an IPO today, one of many companies seeking to hit the public markets. Its filing doesn’t reflect the return of the big-ticket technology offering as much as it reflects a chance to exit while it still can.

Force10, the networking gear maker founded in 1999, filed for an initial public offering today, as part of a rush of companies seeking to hit the public markets while the window seems open. IPO filings are up more than 900 percent in 2010 according to Renaissance Capital, which tracks the IPO market. Despite its relative youth for an IPO filer this year, Force10 represents not a hot new startup seeking access to the public markets, but a grizzled 11-year-old veteran trudging toward an IPO because it simply has to exit, and no buyers have emerged,

At least 13 venture firms firms have invested more than $205 million in Force10 within the last five years alone. The company is seeking to raise $143.75 million through its offering. But given the amount of time its investors have waited, a history of losses, a complicated balance sheet thanks to a series of transactions, and a slew of larger competitors, Force10’s IPO looks a bit like a shotgun wedding.

Force10 sells telecommunications networking gear as well as 10 gigabit Ethernet gear for the data center. It’s the data center market that’s growing most for Force10, although the opportunity to provide aspects of the core network and backhaul components for telecommunications providers as they switch to all-IP architectures is another mid-term opportunity.

Three years ago, after a $60 million Series F round of funding, Om wondered when Force10 would file to go public. But any company that didn’t make it before the fall of 2008, and was stuck staying private thanks to the economic freeze and the credit crunch. In 2009 it purchased Turin, a maker of wireless backhaul gear. It reported pro forma sales (which combined Force10 and its Turin acquisition) of $199.2 million in 2009 and a loss of $76.3 million.

Force10’s IPO may not reflect the return of the big ticket technology IPO as much as it reflects a lack of buyers for the business and the chance to get an exit while IPOs are possible. Instead of comparing it to Tesla, the electric vehicle maker that recently filed to go public, or Silver Spring, a smart grid startup that is expected to file soon, a better comparison would be Calix, the telecommunications gear maker that has raised a similar amount of money in its long history, and filed late last year. Given that too many hot IPOs can overshadow older candidates, perhaps it’s better for Force10 that popular online businesses such as Yelp or Facebook are holding off on IPOs this year.

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  1. More info on Force10’s IPO status from Renaissance Capital…
    http://www.renaissancecapital.com/ipohome/ipoprofile.aspx?ticker=FTEN

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  2. Garrison, their VP of Marketing is a great guy. I wish them well. Sure would be nice to see the return of the fat IPO, or any IPO for that matter….

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  3. [...] of the hot new companies, we are seeing a lot of ’90s retreads finally getting their chance to exit, such as the indomitable Force 10, which has more than $200M [...]

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  4. [...] changing hands for $16.42. I think the success of Calix’s IPO bodes well for other companies such as Force 10 Networks and data center provider Telx, both of which also hope to go public in 2010. Together they [...]

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  5. [...] of capital such as Calix and Meru Networks have gone public, while large hardware companies such as Force 10 have filed to do so. But the trend may not speak to improved prospects for chips, or even for large-scale tech [...]

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  6. [...] of capital such as Calix and Meru Networks have gone public, while large hardware companies such as Force 10 have filed to do so. But the trend may not speak to improved prospects for chips, or even for large-scale tech [...]

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  7. [...] of capital such as Calix and Meru Networks have gone public, while large hardware companies such as Force 10 have filed to do so. But the trend may not speak to improved prospects for chips, or even for large-scale tech [...]

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