Service Provider Networks / (none) /

Riverstone revs up for its IPO

By Phil Hochmuth
The Edge, 02/14/01

Riverstone Networks has set Friday, Feb. 16 as the definite date for the company's IPO, as the company continued its investors road show this week to drum up support for the IPO.

The company plans to offer 10 million shares of stock, with an IPO price ranging between $11 and $13. The lead underwriter for the IPO is Morgan Stanley Dean Witter & Co, along with JP Morgan, Lehman Brothers and Salomon Smith Barney.

Riverstone bills itself exclusively as a maker of metro-area service provider switches, unlike competitors Extreme Networks and Foundry Networks, both of which make switches for enterprise customers as well as metropolitan-area network (MAN) service providers.

To state its case with investors, the company has stressed that it is a revenue-generating company with real customers. Riverstone, as a subsidiary of Cabletron, reported $25.7 million in sales in its third quarter, and has seen revenue growth of 23% to 30% over the last three quarters, making it the fastest growing company of the four business units Cabletron spun off last February. Some users of Riverstone's gear include British Telecom, MAN service provider Telseon and WorldCom.

Riverstone filed for an IPO last September, and had speculated about a November offering, but a downturn in the markets pushed its timetable back.

Riverstone will be the first of the four Cabletron spinoff companies to go public. While observers say that market conditions are not exactly optimal for a high-tech IPO, the Riverstone offering will keep in line with Cabletron's 18-month plan for making public companies out of its four subsidiaries.

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