Palo Alto Networks Inc., the provider of Internet firewalls that’s planning to go public next week, has attracted more than enough orders to cover its share sale, according to a person with knowledge of the process.
The person, who asked not to be identified because the deliberations are private, declined to indicate by how many times the initial public offering is oversubscribed. Palo Alto and its shareholders are selling 6.2 million shares at $34 to $37 each, regulatory filings (PANW:US) show.
Technology companies are winning investors’ interest as the U.S. market picks up again after a monthlong drought following Facebook Inc. (FB:US)’s May 17 IPO, the largest on record for an Internet business. Palo Alto and four other companies aim to complete initial offerings in New York next week, the busiest since April 30.
The offering is scheduled to price on July 19, according to data compiled by Bloomberg. Mike Haro, a spokesman for Santa Clara, California-based Palo Alto, didn’t respond to an e-mail message and a phone call seeking comment. Pen Pendleton, a spokesman for Morgan Stanley (MS:US), the bank leading the sale, declined to comment. Goldman Sachs Group Inc. (GS:US) and Citigroup Inc. (C:US) are also helping manage the sale.
The midpoint of Palo Alto’s price range would value the company at about $2.36 billion, or about 11 times sales (PANW:US) in the 12 months through April, Bloomberg data show. That’s almost double the average of 5.7 times for similar-sized peers (PANW:US) such as Juniper Networks Inc. and Check Point Software Technologies Ltd., which are named as competitors in Palo Alto Networks’ filing.
The Palo Alto, California-based company, founded in 2005, is offering 4.69 million shares to fund working capital, while existing holders are offering 1.5 million, regulatory filings show. Venture firms Greylock Partners and Sequoia Capital aren’t selling shares and combined will own more than 41 percent of the company after the IPO.
Kayak Software Corp. (KYAK:US), Five Below Inc., Fender Musical Instruments Corp. (FNDR:US) and Durata Therapeutics Inc. are also scheduled to go public in the U.S. next week. Together with Palo Alto, the companies are seeking to raise a combined $693 million, Bloomberg data show.
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