Israeli broadband service technology developer Allot Communications filed with U.S. regulators on Tuesday to sell 6.5 million ordinary shares at an estimated price of $9 to $11 each in an initial public offering of stock. If it wins the higher price, it ill be raising $71 million.
The company said in a prospectus filed with the U.S. Securities and Exchange Commission that Lehman Brothers, Deutsche Bank Securities, CIBC World Markets, and RBC Capital Markets are underwriting the IPO.
Underwriters have the option to buy 975,000 more shares for $11 million more. Under the most optimistic scenario, its market capitalization post-money would be $230 million.
The last quarter is traditionally a strong one for IPOs. Allot, which is presumably counting on that tradition, will be trading on Nasdaq under the symbol ALLT.
The company, which specializes in systems to optimize broadband communications systems, made $24.5 million revenues in the first nine months of 2006, an increase of more than 50% compared with the same period of 2005.
Allot is also profitable, if not by far. For the first nine months of 2006 it netted $560,000, compared with losing $2.7 million net in the same nine-month period of 2005.
Since the company's establishment in 1997, it has accrued losses of $37 million.
Although the company is barely profitable, it is operating in a fast-growing market. Its systems serve Internet service providers, helping them dynamically allot changing bandwidth to various clients. In short, the systems optimize bandwidth exploitation in an era of growing use. Bandwidth is gobbled by data-heavy media including games and content downloads, not to mention phone calls over the Internet.
Allot only turned profitable in the first half of 2006, which leaves it to prove that it can maintain black ink over time.
