InfiniBand Gear Maker Voltaire to Go Public

Published: July 12, 2007

by Timothy Prickett Morgan

InfiniBand switch and software maker Voltaire, which is one of the few players in this part of the server and storage interconnection market, said this week that it plans to take itself public.

Voltaire was founded in 1997 and has its main headquarters in Herzeliya, Israel; its headquarters in the United States is in Billerica, Massachusetts (which is along the Route 128 high-tech corridor). The company plans to do its initial public offering on the Nasdaq stock exchange. According to the company's filing with the U.S. Securities and Exchange Commission, Voltaire and its current backers are going to put nearly 7.7 million shares up on sale on the Nasdaq; just under 5.8 million are coming from Voltaire's stock and just over 1.9 million are coming from its backers, who own shares. J.P. Morgan Securities Merrill Lynch are acting as joint book-running managers for Voltaire's IPO, and Thomas Weisel Partners and RBC Capital Markets are co-managers for the IPO. The company has the uber-froid stock ticker of "VOLT."

Voltaire anticipates that it will price the shares at between $12 and $14 a pop, and says that it will not receive any proceeds from the sale of its backers' stock sales. For its part, Voltaire anticipates raising about $67.5 million from the offering if it hits the midrange of its target initial stock price. (This is the amount after fees are paid to the brokers and managers.) If the offering is over subscribed, another 865,462 shares from the company could be floated, raising even more cash. The proceeds will be used for business development, working capital, research and development, and to repay a $5 million loan. Some of the case, according to the filing, will be used to make acquisitions.

The InfiniBand market is coming along, but it is by no means an easy market to make money in, but it is looking like it is getting easier to come close. Voltaire posted sales of $4.9 million in 2004, with a loss of $15.4 million. In 2005, the company grew sales significantly, to $15.4 million; losses that year fell to $13.5 million. In 2006, Voltaire nearly doubled its sales to $30.4 million, but losses stayed about the same at just under $13 million. In the first three months of 2007, Voltaire had sales of $8.6 million and a net loss of $3 million.

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