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Nexsan tries for IPO - again

Second time lucky

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Nexsan is trying for an IPO again, two years after the first attempt, and hoping that recovery from recession will open investors' wallets.

The company supplies storage arrays to hold long-term data at low cost by using graduated spin-down (aka AutoMAID) to reduce energy costs and deduplication to increase storage efficiency. Nexsan started out after its 1999 founding by offering low-cost storage arrays combining ATA drives and RAID controllers, called ATABeasts. These developed into SATABeasts and smaller SATABoys, and then SASBeasts and SASBoys too.

ITN bought Evertrust, a Canadian software company, in 2005 and used its software to develop the Assureon line of content-addressable archival data storage products.

Nexsan had three rounds of seed capital funding, which brought in $11m up to 2003, then it went through an A-round and landed $17m in December 2003. Another funding round brought in $7.5m in April 2007, making a total of $36.5m that we know about, and the company filed for an IPO in May 2008.

That IPO filing followed a successful year for storage IPOs with Data Domain, Compellent and 3PAR all going public in 2007. The 2008 SEC filing revealed Nexsan had not been profitable since its founding. The company was looking to raise $80.5m from that IPO, which was cancelled as the recession took hold.

We're told that it hopes to raise a much lower figure, $55m, this time around, through issuing 5 million shares for $10-$12/share. It says it recorded $63m sales in the 2009 calendar year and has been free cash flow positive for the past three years, although it does not say it has made profits.

The contrast with failed full-spindown MAID (Massive Array of Idle Drives) vendor Copan is telling. The firm went bankrupt after investors funded it to the tune of $100m, and SGI picked up some of its assets for $2m last week. Nexsan has cost its investors a lot less money and may well give them a fairly decent return if this IPO succeeds.

Storage and system consulting Glasshouse filed for an IPO earlier this year - its second time as well. Oddly enough its previous attempt was roughly at the same time as Nexsan's and it too has lowered its IPO goal, from the first attempt's $100m to $75m.

Let the modestly good IPO times roll. ®

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