Fusion-Io to Be Worth Up to $1.17 Billion in Initial Share Sale
Fusion-io Inc. (FIO), a maker of flash-memory technology for companies including Facebook Inc. (FB), plans to sell shares in its initial public offering for $13 to $15 apiece, valuing the company at as much as $1.17 billion.
Fusion-io said it will sell 10.8 million shares along with an additional 1.54 million to be sold by other stockholders, according to a regulatory filing today. The stock will trade on the New York Stock Exchange under the ticker FIO.
The Salt Lake City-based company aims to raise as much as $212.2 million, up from the $150 million offering announced in March. The increase follows last week’s IPO of LinkedIn Corp., (LNKD) which more than doubled in value on its first day of trading, even after raising the per-share price. Founded in 2005, Fusion-io is benefiting from a shift among corporations to flash memory from traditional storage drives.
Flash has no moving parts and can access data more quickly than disks, which rely on spinning platters to hold information. Facebook, owner of the world’s biggest social network, is Fusion-io’s largest customer, accounting for 47 percent of revenue in the nine months ended March 31.
Fusion-io has raised more than $110 million in venture capital, and it counts Apple Inc. co-founder Steve Wozniak among its top executives.
Sales in the first quarter surged fivefold to $67.3 million, from $13.4 million a year earlier, according to the filing. Assuming the same revenue over the next three quarters and a $1.17 billion valuation, Fusion-io will be valued at 4.35 times sales, compared with a price-to-sales ratio of about 11 for LinkedIn when its shares started trading.
Fusion-io turned profitable in the first quarter, reporting net income of $7.04 million, compared with a $6.71 million loss a year earlier.
The company’s biggest shareholder is venture firm New Enterprise Associates, which owns 39 percent of the company. Lightspeed Venture Partners holds 13 percent, and Chief Executive Officer David Flynn controls 10 percent.
Fusion-io said in January that it’s shipped more than 15 petabytes of flash memory to corporations in the past year -- enough to hold more than 199 years’ worth of continuously played high-definition video. Fusion-io combines software and memory chips to speed the rate that server computers can access data.
Its products are sold through Hewlett-Packard Co. (HPQ), International Business Machines Corp. (IBM) and Dell Inc. The bulk of Fusion-io’s purchases come from a limited number of partners, with the 10 largest customers accounting for 91 percent of revenue in the nine months ended March 31.
“As a consequence of our limited number of customers and the concentrated nature of their purchases, our quarterly revenue and operating results may fluctuate from quarter to quarter and are difficult to estimate,” the company said in today’s filing.
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