3Com to spin out TippingPoint
- — 02 July, 2007 08:35
3Com Friday said it would execute an IPO of common stock of its wholly owned subsidiary, TippingPoint.
TippingPoint provides network-based intrusion-prevention systems and filtering services for corporations, government agencies, service providers and academic institutions. 3Com bought TippingPoint in 2004.
3Com expects to file the IPO by the end of the calendar year.
"We believe this move will let 3Com and TippingPoint focus on their core strengths, target markets and strategic goals," said Edgar Masri, 3Com's president and CEO, in a statement. "The decision to IPO TippingPoint enables 3Com to focus more closely on its core business -- delivering integrated, secure, converged network infrastructure solutions to enterprises and increasing H3C [Huawei-3Com joint venture] sales worldwide."
Masri added that the move also reinforces 3Com's commitment to its Open Services Networking strategy of providing network infrastructure that enables the convergence of applications and emerging technologies.
3Com intends to remain a majority TippingPoint shareholder following the IPO and plans to reduce its ownership over time in subsequent transactions. 3Com will consolidate TippingPoint results in its quarterly and annual financial reports for the foreseeable future.
Separately, 3Com posted a fourth-quarter net loss of US$66 million on revenue of $311 million. This compares with a fourth-quarter 2006 loss of US$15 million on revenue of $255 million.
For the full 2007 fiscal year, 3Com recorded revenue of US$1.3 billion, a 59 percent increase compared with the 2006 fiscal year, primarily because of the consolidation of H-3C's results in the current period. On a pro forma basis and assuming H-3C results had been consolidated from the beginning of the periods, full 2007 fiscal year revenue would have increased 11 percent.
3Com's net loss for the 2007 fiscal year was US$88.6 million, compared with a net loss of US$100.7 million for the 2006 fiscal year.