Friday, December 28, 2007

Red Herring: Anda Networks files S-1

"Anda Networks, a venture capital-backed maker of equipment that helps Verizon and other telecom carriers provide broadband service to business customers, has filed for an $86.25 million initial public offering.

The Sunnyvale, California-based company, which says its "Silicon Valley-China hybrid business model" allows it to keep costs low while accelerating feature releases, is backed by a slate of venture capital firms including Venrock Associates, owner of 27.8 percent of pre-IPO shares. Other major investors include: Highland Capital, 20.8 percent; Crimson Asia Capital, 11.9 percent; Saints Ventures, 9.3 percent, Cascade Capital Management, 7.1 percent, and Fuhwa Venture Capital, 5.7 percent.

Anda's equipment lets carriers deliver broadband services to businesses over fiber and legacy-based copper networks. The company also helps wireless carriers move network traffic from wireless base stations back to their core networks. Competitors include Adtran, MRV Communications, Overture Networks, and RAD Communications.

The company bases its design, sales, and management in the United States, while keeping engineering and manufacturing functions in China. It manufactures gear for Ciena and has a reseller relationship with Nortel Networks.

In the nine months ended September 30, Verizon accounted for about 71 percent of revenue. Other major customers included XO Communications and MTS Allstream.

Thomas Weisel Partners and RBC Capital Markets are acting as underwriters for the IPO. The company has applied for a listing on the Nasdaq Global Market under the ticker symbol "ANDA."

The company, incorporated in 1998, has yet to turn a profit, but for the nine months ended September 30, its revenue increased to $18.3 million from $6.2 million in the 2006 period and its loss narrowed to $2.2 million, or $0.11 cents per share from $11 million, or $1.12 per share, in the prior year."

Form S-1:

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