• PrivCo expects Palo Alto Networks - whose IPO road show is scheduled to begin imminently - to be a rare successful summer IPO, for a valuation of $2.4 billion at the top of the range.
  • Palo Alto Networks will be the latest in a series of successful enterprise tech IPOs, on the heels of winners from Jive Software, Splunk, and most recently ServiceNow, in contrast to the poor performance of recent consumer tech IPOs. 
  • Major venture capital firms Greylock Partners and Sequoia Capital - Palo Alto Network's earliest backers - stand to be the biggest winners, hauling in a profit of nearly half a billion dollars for each firm, or 31x their investment - in just seven years. 
  • Globespan Capital stands to make a $171 million profit - or 16.5x their investment- in under five years.

     

 July 11, 2012 8:00am EST New York, NY- Seven months after PrivCo declared privately-held Palo Alto Networks (PrivCo Private Company Ticker: PALOP) a "Model IPO Candidate", Palo Alto Networks has set its expected IPO price range at $34 - $37 per share, which would value the company at $2.36 billion at the top of the range. Palo Alto Networks is a privately-held technology company providing cloud-based enterprise security software to large corporate clients.

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  • PrivCo expects Palo Alto Networks to price at the top of its $34 - $37 price range, raising $229.4 million through the sale of 6.2 million shares.
  • Palo Alto Networks’ pending IPO comes in the wake of ServiceNow’s successful June 2012 IPO, which has traded up 39.2% from its $18 IPO price on June 29th, 2012.
  • Palo Alto Networks presents an attractive solution to the cloud tech enterprise B2B market, where the landscape has traditionally been dominated by Oracle, SAP and IBM, among others.
  • PrivCo calculates that underwriters Morgan Stanley, Goldman Sachs and Citigroup have valued Palo Alto Networks at approximately $2.4 billion (at $37 top of range), or 10.7x trailing twelve month revenues.
  • When considering the competitive universe of Infoblox, Jive Software, ServiceNow and Splunk, PrivCo believes that the underwriters conservatively valued Palo Alto Networks, in order to guarantee a fully subscribed book and successful pricing.
  • Early investors, Greylock Partners, Sequoia Capital and Globespan Capital Partners will not be exiting their stakes in the company, and will have their respective ownership valued at $510.1 million, $510.1 million and $181.9 million.
  • Greylock and Sequoia, which initially invested in Palo Alto Networks in 2005, will earn a return of almost half a billion dollars over their seven year investment.
  • Globespan looks to profit $171 million, or 16.5x their investment over five years.
  • “Palo Alto Networks had two options: approach the market now in July, in a historically dormant summer period for IPOs, or wait until September, when the large number of other postponed and filed IPO’s will likely compete for institutional investors’ attention,” said PrivCo CEO and Founder, Sam Hamadeh. “While the IPO market had been distracted by consumer technology companies for much of the past year, strong enterprise tech companies such as Palo Alto Networks have been building strong, sustainable businesses, and PrivCo expects strong investor appetite for Palo Alto Networks and other B2B tech IPOs.” 

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