The resurgence in communications equipment IPOs that began in 2006 is expected to grow in 2007, according to investment bank Merriman Currihan Ford. It may even improve the stock outlook for long suffering publicly traded companies operating in this sector:
"The wireline communications sector saw its first IPOs in several years in 2006, and we expect this trend to
accelerate in 2007 across the optical (OpNext and others), video networking/cable TV (recently filed Bigband
Networks) and voice over IP (Veraz Networks among others) offering investors both interesting direct investment
opportunities as well as derivative implications for established vendors. It will be interesting to note,
for example, how the valuation of Bigband Networks, a fast growing (50%-plus) supplier video and IP networking
supplier to cable and telco carriers compares with a recovering Harmonic and established Arris. So
too will be the case with a loss-making but growing OpNext and Finisar, as well as emerging VoIP infrastructure
vendor Veraz Networks with established players such as Tekelec and Sonus."
Ericsson's pending $2 billion acquisition of Redback Networks isn't hurting the sector's prospects either. This is great news for the patient venture capitalists that have capital intensive communications startups in their portfolio that are desperate for liquidity events.
Here's a list of last year's notable communications IPOs mentioned in Merriman's research report released today:
Tags: ipo, vc, venture+capital
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