Cisco rival Arista Networks picks banks for IPO – sources

November 13, 2013 Leave a comment

Cisco rival Arista Networks picks banks for IPO – sources

6:01pm EST

By Nicola Leske and Soyoung Kim

NEW YORK (Reuters) – Arista Networks, a maker of network switches that competes with much bigger rival Cisco Systems Inc, has selected banks to lead a proposed initial public offering for next year, according to people familiar with the matter. Morgan Stanley, Citigroup Inc and Credit Suisse Group will lead the offering that is at an early stage of planning, the people said on Tuesday, asking not to be named because the matter is not public.Representatives for Morgan Stanley did not immediately respond to requests for comment. Arista, Citigroup and Credit Suisse declined to comment.

The Santa Clara-based company could have a valuation of around $2.5 billion, according to some industry analysts who attended a presentation the company made in September. Arista’s 2013 revenue is likely to exceed $300 million, ISI Group analyst Brian Marshall said.

Arista is one of several high-profile technology companies gearing up for an IPO, on the heels of a successful debut by Twitter Inc last week, which raised more than $1.8 billion for the microblogging company.

Reuters reported on Friday that fast-growing data storage company Box has selected Morgan Stanley, Credit Suisse and JPMorgan Chase & Co to lead a proposed IPO that could raise around $500 million.

Arista was started in 2004 by German-born Andy Bechtolsheim and Canadian native David Cheriton, a University of Stanford computer science professor, with $100 million in funding.

The company introduced its first products, used in high frequency trading, in 2008. It has also gained traction with new uses for its products such as cloud computing, big data and software defined networking.

It partners with major technology companies including VMware Inc, Microsoft Corp, SAP AG as well as Palo Alto Networks Inc, Riverbed Technology Inc, Splunk Inc and F5 Networks Inc.

Both Bechtolsheim and Cheriton have a history of launching successful companies, and are known to have a knack for smart investments – they were the initial investors in Google.

Bechtolsheim co-founded Sun Microsystems in 1982. It was bought by Oracle in 2010.

Cheriton and Bechtolsheim also founded switching technology company Granite Systems, which was acquired by Cisco in 1996. They also started server-technology firm Kealia, which was bought by Sun Microsystems in 2004.

Both men worked with Cisco for some years.

It was Cisco they looked to when they needed a chief executive for Arista, and they attracted Jayshree Ullal – a 15-year Cisco veteran who was responsible for data center switching and services.

All of Arista’s senior management, with the exception of its chief financial officer and its senior vice president of global sales operations, consists of former Cisco employees. Long-time Cisco veterans, Charlie Giancarlo and Dan Scheinman, also sit on the company’s board.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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