Barracuda Networks plots IPO to swim with the big fish

Proceeds could be used to bolster cloud offering and make acquisitions

Barracuda Networks has become the latest security vendor to announce its intent to float on the stock market.

The Californian vendor plans to sell up to $100m (£61.6m) of common stock through its initial public offering (IPO), according to an S-1 form filed with the Securities and Exchange Commission yesterday.

It listed Morgan Stanley, JP Morgan, and BofA Merrill Lynch as bookrunners for the IPO but did not disclose whether it will list on NASDAQ or New York Stock Exchange.

IPOs are very much in vogue among the IT security vendor fraternity, with anti-malware specialist FireEye taking the plunge in September and rival Palo Alto debuting on the stock market a year earlier. And there is no shortage of other emerging names weighing up going public.

Barracuda began life in 2003 as an anti-spam specialist but has in recent years striven to evolve into a wider security and storage player. Citing Gartner figures, it claimed its total addressable security market – encompassing a range of solutions including secure email gateways, IPS, VPNs and firewalls – was worth $14.4bn last year. It claimed its total annual addressable storage market is $15.9bn, pointing to IDC figures.

For its last fiscal year which ended in February 2013, Barracuda stumbled to a $7.4m net loss on revenue that rose 24 per cent to $198.9m. More than two thirds of its sales are subscription based.

Only 26 per cent of its sales come from outside North America.

Barracuda said it would use the proceeds mainly for capital expenditure and general corporate purposes. This could include investments in datacentre infrastructure to expand its cloud-based services and improve its global facilities. A portion of the proceeds may also be used to make acquisitions.

Ian Kilpatrick, chairman of Barracuda distributor Wick Hill, said: "I's certainly a good time for Barracuda, both with the changes in the business and the changing portfolio. We've seen some exceptional growth with them, particularly with the new products in backup and application control. It's a good time ot buy shares in them."