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Fortinet launches rare net security IPO

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Fortinet has set a price of $12.50 a share for its initial public offering on Wednesday. If all goes to plan, the security appliance firm and its investors stand to rake in a more than $156m through the offer.

Fortinet shares are due to begin trading on Nasdaq on 18 November under the ticker symbol "FTNT", as part of the first information security floatation since 2007.

Fortinet is selling 5.8 million shares and existing stockholders are offering 6.7 million in the combined 12.5 million share float. In addition, Fortinet has granted the underwriters a 30-day option to purchase up to an additional 1.88 million shares of common stock to cover potential extra demand. Morgan Stanley, J.P. Morgan and Deutsche Bank are jointly running the offering.

The security appliance firm specialises in making Unified Threat Management appliances that combine anti-virus, firewall and intrusion detection functions in one-box. These so-called God boxes are easier to manage than a range of different products covering similar functions, a factor that makes them popular for use by small businesses and in the branch offices of larger firms.

Cash from the deal will be used to either finance product development or fund possible future acquisitions.

Fortinet's IPO is the first in the information security business since Sourcefire - a commercial distributor of systems based on the Snort intrusion detection system - went public to raise $86m back in 2007. The end game for security firms more commonly involves building up a presence in the information security market before selling out to the IT majors (Cisco, Symantec etc).

Ken Xie, the founder and former chief exec of NetScreen, established Fortinet in 2000. NetScreen, which makes intrusion prevention kit, was acquired by Juniper Networks for around $3.5bn back in April 2004. ®

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