Xtera Communications Files for IPO

Xtera Communications has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). No terms were given in the filing, but the offering is valued up to $60 million. The company intends to list on the Nasdaq Global Market under the symbol XCOM.

The underwriters for the offering are Needham, Cowen and BMO Capital Markets.

This is a leading provider of high-capacity, cost-effective optical transport solutions, supporting the high growth in global demand for bandwidth. The company sells high-capacity optical transport solutions to telecommunications service providers, content service providers, enterprises and government entities worldwide to support their deployments of long-haul terrestrial and submarine optical cable networks. Xtera believes that its proprietary Wise Raman optical amplification technology allows for capacity and reach performance advantages over competitive products that are based on conventional Erbium-Doped Fiber Amplifier (EDFA) technology.

The company’s solutions are capable of spanning over 1,500 kilometers with capacity of 64 terabits per second. The solutions are purpose-built for varying customer demands of capacity, reach and cost. The modular nature of these solutions allows for capital-efficient capacity expansion over time, as the customer’s bandwidth needs grow.

Xtera has an extensive operating track record, having deployed its solutions for more than 10 years in 60 countries across five continents. Due to its outsourced manufacturing model, the company believes that it has the capability to support high revenue growth, while controlling operating costs.

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In the filing, Xtera explained its use of proceeds:

We intend to use the net proceeds to us from this offering for working capital and other general corporate purposes, including to finance our expected growth, develop new products or fund capital expenditures. We may also use a portion of the net proceeds to repay borrowings under our credit facility or term loan, or to expand our existing business through acquisitions of other businesses, products or technologies. However, we do not have agreements or commitments for any specific repayments or acquisitions at this time.