Data Domain Inc. officially announced this morning that it filed an
S-1 statement with the Securities and Exchange Commission (SEC)
March 30 in preparation for going public this year.
Goldman, Sachs & Co. and Morgan Stanley will act as joint
bookrunning managers, and Thomas Weisel Partners LLC and Pacific
Crest Securities will act as co-managers for the offering,
according to a press release.
According to its filing, Data Domain will seek a Nasdaq listing
under DDUP. According to a Market Watch report, the company
is expecting to raise $100 million.
"We intend to use the net proceeds from this offering for working
capital and other general corporate purposes," the company said in
its S-1 document. "We may also use a portion of the net proceeds to
acquire other businesses, products or technologies. We do not have
agreements or commitments for any specific acquisitions at this
time."
Data Domain officials were not available for further comment,
according to a spokesperson reached Monday morning.
Like fellow initial public offerings (IPO) Riverbed Technology
Corp. and Islion Systems Inc., Data Domain is not yet profitable.
In its consolidated financial form on the S-1 statement, the
company showed net losses for 2004, 2005 and 2006, or $9.8 million,
$13.7 million and $4.02 million, respectively.
"As of December 31, 2006, our accumulated deficit was $36.6
million," the filing reads. "We expect to continue to incur losses,
and we may not become profitable in the foreseeable future."
Meanwhile, Quantum, which holds
data deduplication patent through subsidiary
Rocksoft, has a patent cross-licensing agreement with Data
Domain for its deduplication technology and will receive 390,000
shares of Data Domain's common stock when it is offered.
Data Domain is part of a new "graduating class" of IPOs filed in
the storage industry over the last six months. Most of the
companies, which now include CommVault Systems Inc. and Double-Take
Software Inc., as well as Riverbed and Isilon, were founded in
2002. Riverbed and Isilon both reported losses in their first
quarters as public companies. Industry experts also expect further
public offerings in the storage market this year. Likely candidates
include EqualLogic Corp. and Compellent Technologies Inc.
As the IPO trend got under way in earnest last year, analysts
said the upside for storage users is that startups that raise money
through IPOs will have more to invest in customer service and could
become more financially stable in the long term. For example, some
Isilon customers reported that company's IPO allowed for better
staffing at its tech support hotline.
Other analysts are less sanguine, particularly when it comes to
companies that have yet to turn a profit. According to a column by
Steve Duplessie, founder and analyst with the Enterprise Strategy
Group in Storage magazine's December issue, "We seem to have
learned nothing from the lessons imposed on us during the stock
market crash of 2000 ... After a dearth of IPOs over the last five
years, we've suddenly found ourselves back on the brink of
stupidity."