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IPO Watch: Pure Storage Plans To Raise $450 Mln


Data storage company Pure Storage, Inc. is seeking to raise up to $450 million in an initial public offering.

The Mountain View, California-based maker of all-flash storage products said it is offering to sell 25 million shares of its Class A shares at a price range of $16 to $18 per share.

At that price range, Pure Storage would be valued at up to $3.3 billion. The company's Class A common stock has been approved for listing on the New York Stock Exchange under the trading symbol "PSTG."

In a filing with the Securities and Exchange Commission, Pure Storage said it expects to use net proceeds from the offering primarily for general corporate purposes, including expansion of its product development as well as sales and marketing organizations.

The company may also use a part of the net proceeds for acquisitions, or for investments in technologies, solutions or businesses that complement its business.

Pure Storage said that holders of its outstanding Class B common stock will represent about 98.5 percent of the voting power immediately following the IPO, with the company's directors, executive officers and principal stockholders representing about 59.9 percent of such voting power.

Holders of Class B shares include the company's venture-capital investors such as Greylock Partners, Index Ventures, Redpoint Ventures and Sutter Hill Ventures.

According to International Data Corp. or IDC, the combined worldwide spend by enterprises on external storage hardware priced at more than $50,000 per array and storage and device management, storage infrastructure and storage replication software is estimated to grow to $27 billion in 2018 from about $24.2 billion in 2014.

Despite flash storage being more expensive, customers are increasingly replacing traditional disk-based systems with all-flash storage as they are typically much faster.

The spend on all-flash solutions is expected to grow to $3.3 billion in 2018 from $1.3 billion in 2014, representing a 26.6 percent compounded annual growth rate.

Since launching its modular and scalable all-flash array hardware FlashArray in May 2012, Pure Storage's customer base has grown to over 1,100 customers.

However, the company, which counts LinkedIn Corp., ConocoPhillips and Nielsen as its customers, has not achieved profitability for any fiscal year since its inception in October 2009.

Net loss for the six months ended July 31, 2015 widened to $112.96 million from $95.20 million in the year-ago period. Revenue for the half-year period more than doubled to $158.74 million.

Morgan Stanley, Goldman Sachs & Co, Barclays, Allen & Co. LLC and BofA Merrill Lynch are acting as joint bookrunners to the offering.

by RTTNews Staff Writer

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