Shares of Isilon surge in IPO
Seattle Times technology reporter
Wall Street investors were in a generous mood Thursday, pricing Isilon Systems shares in its initial public offering (IPO) above the company's highest expectations.
Based in Seattle, Isilon sold 8,350,000 shares for $13 each to raise a total of $108.6 million, making it the largest IPO in Washington this year.
When the company first filed to go public in September, it said it may be able to sell shares for as much as $9.50 a piece.
In a document filed Thursday with the Securities and Exchange Commission, those expectations increased to $12. But by late Thursday afternoon, the company was able to secure $13 a share.
Isilon's stock will be listed on the Nasdaq market under the symbol "ISLN" and will begin trading today.
"I think there's a couple of reasons," said spokesman Jay Wampold. "One is that there's heavy demand in the financial markets, and I think there was demand in the financial markets for our company and our story."
By raising $108.6 million, it surpassed medical-device company Northstar Neuroscience's $106.5 million public offering in May.
Isilon, founded in 2001, builds storage systems with special software designed for large media files. The need for such storage devices has soared as companies continue to create archives of digital content. Isilon's customers include ABC, U.S. Geological Survey, Kodak EasyShare Gallery, Sports Illustrated and MySpace, among others.
Isilon plans to use the proceeds of the IPO to pay off loans and fund capital expenditures of $11 million in 2007 as it expands marketing, sales, manufacturing and engineering.
As of October, the company had $17.9 million in cash and equivalents. In the nine months ended Oct. 1, the company had revenue of $41.6 million, a 236 percent increase compared with the same period a year earlier. In the nine months ended Oct. 1, it had a net loss of $15 million.
The company's private investors include Lehman Brothers Venture Partners, Sequoia Capital, Atlas Venture and Madrona Venture Group. After the offering, Atlas owns 24.4 percent of the company; Sequoia owns 19.3 percent; Madrona owns 16.5 percent and Lehman owns 6.6 percent.
Tricia Duryee: 206-464-3283 or firstname.lastname@example.org
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