SolarWinds IPO Debuts With Strength (SWI)

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SolarWinds, Inc. (NYSE: SWI) is set to debut in an initial public offering this Wednesday morning.  We got a premium pricing at $12.50 for 12.11 million shares, which is higher than the $9.50 to $11.50 indicated price range.  Despite the name, this is not a green technology or solar power company.

About 9 million shares are from the company and some 3.11 million are form selling holders. JPMorgan Chase, Goldman Sachs, and Morgan Stanley are the lead underwriters on the offering; and co-managers are listed as Jefferies & Co., Thomas Weisel Partners, and Ladenburg Thalmann.  The underwriting group has an overallotment option to sell some 1.81 million shares.

As a reminder, this is not a solar power company.  The company makes enterprise-class network management software ranging from individual software tools to more comprehensive software products, solve problems faced every day by network professionals and help to enable efficient and effective network management.

For the years ended December 31, 2006, 2007 and 2008 and the three months ended March 31, 2009, it generated:

  • Revenue of $38.2 million, $61.7 million, $93.1 million and $24.1 million, respectively;
  • Operating income of $25.4 million, $30.9 million, $42.0 million and $10.0 million, respectively;
  • Adjusted EBITDA of $27.1 million, $35.4 million, $48.4 million and $12.1 million, respectively.

JON C. OGG