A10 to plough IPO proceeds into building channel

ADC vendor aiming to raise up to $100m through New York flotation

Networking vendor A10 Networks intends to plough some of the proceeds of its planned $100m (£60m) initial public offering (IPO) into bolstering its channel.

The application delivery controller (ADC) specialist wants to list on the New York Stock Exchange under the symbol "ATEN", according to the S-1 form it filed with the US Securities and Exchange Commission last week.

Founded in 2004, A10 saw revenue grow 18 per cent to $141.7m in 2013, although just eight per cent came from EMEA. Net losses reached $90.2m and $27.1m in 2012 and 2013 respectively, as litigation disputes with Brocade and Radware took their toll on the bottom line.

The vendor has earmarked $20m to $30m of the potential net proceeds from the IPO for "growth strategies", including bolstering its channel.

"We intend to focus on enhancing and expanding in-depth relationships with partners that have strong application networking expertise and a reputation for providing solutions to customers," A10 stated.

"We also intend to increase the number of our distribution channel partners, OEMs and technology partners in order to expand our sales reach."

Driving greater penetration of its customer base, expanding its global sales organisation and investing in marketing were listed as three other key growth strategies.

With 2,900 customers in 65 countries, A10 operates in two other areas outside its core ADC stronghold, where it competes with the likes of Citrix, F5 Networks, Radware and Brocade. These are carrier-grade network address translation (CGN) and DDoS protection, the latter of which it entered only last month and where it sees Arbor Networks and Radware as its key competitors.

Last year, A10 drew 48 per cent of its revenue from its home US market, 28 per cent from Japan, 11 per cent from elsewhere in Asia-Pacific and eight per cent from EMEA.

Morgan Stanley, BofA Merrill Lynch, JP Morgan and RBC Capital Markets are acting as joint book runners for the proposed offering. The number of shares to be offered and the price range for the proposed offering have yet to be determined.