Force10 (FCTN), which provides high performance IP-based networking software and equipment for data centers, withdrew its plans for an initial public offering on Wednesday following its agreement to be acquired by Dell. Media reports indicate that Dell paid $700 million, or 3.5x annualized sales.
The San Jose, CA-based company, which was founded in 1999 and merged with Turin Networks in 2009, has raised more than $630 million in venture capital. Force10 offers data center networking solutions and Open Cloud Networking technology, shipping its products to more than 1,500 customers in 62 countries worldwide. The company booked $178 million in sales for the 12 months ended March 31, 2011, deriving 80% of its revenues from North American operations.
The acquisition of Force10 is just the latest in a sector that has seen strong M&A activity over the past few years. With this deal, Dell adds Force10 to a growing portfolio of acquired companies that includes storage area network (SAN) solutions provider EqualLogic, which had filed to go public before Dell bought it in 2008, and storage systems maker Compellent Technologies. In September 2010, Hewlett-Packard won a bidding war with Dell over data-storage provider 3PAR, while IBM snapped up data warehousing company Netezza.
J.P. Morgan and Deutsche Bank Securities were set to be the lead underwriters on the Force10 IPO, which was expected to raise as much as $100 million.
