Amidst continued earnings losses, 3Com Thursday said it plans to take its TippingPoint security subsidiary public via an IPO.
The company has not yet filed a registration statement for the IPO with the U.S. Securities and Exchange Commission but plans to by the end of this year, according to a 3Com statement.
The move comes two-and-a-half years after 3Com shelled out roughly $430 million to acquire TippingPoint and its lineup of intrusion detection and prevention products in January, 2005. TippingPoint has largely been operating independently under the 3Com banner since then.
"We believe this move will enable 3Com and TippingPoint to focus on their core strengths, target markets and strategic goals," said Edgar Masri, president and CEO of 3Com, Marlborough, Mass., in the statement.
3Com intends to retain ownership of a majority share of the company following the IPO but will reduce that ownership over time, according to the statement.
Some solution providers said TippingPoint will likely be better off on its own.
"It wouldn't bother me one bit. We didn't have any relationship with 3Com; TippingPoint was pretty independent.," said Dave Whitney, regional manager at Flair Data Systems, a solution provider and TippingPoint partner based in Plano, Tex., of 3Com's plans. "They tried to get the 3Com people involved, and it just didn't work. Then they kind of split off again and we were dealing just with TippingPoint people, and that worked a lot better."
Andrew Plato, president of Anitian Enterprise Security, a Beaverton, Ore.-based solution provider, said both vendors stand to benefit.
"I think it's a great idea. It's the kind of thing that can only help [3Com] and help TippingPoint," Plato said. "[Unified Threat Management appliances] are growing in small and medium businesses, but there's quite a big market for the pure [intrusion-prevention systems] in the enterprise, and in that space is TippingPoint has 25- to 30-percent market penetration."
Separately, 3Com Thursday reported a loss of $66.2 million, or 17 cents per share, for its fourth quarter, ended June 1, compared to a loss of $15.2 million, or 4 cents per share, the same quarter a year ago. That includes $63 million in costs related its acquisition of the joint venture it previously held with Chinese networking vendor Huawei Technologies. Revenue for the quarter climbed to $310.9 million, up from $255.3 million a year ago. 3Com attributed the revenue growth to the absorption of the joint venture.
For fiscal 2007, 3Com reported a loss of $88.6 million, narrower than its loss of $110.7 million in fiscal 2006. Revenue for the year climbed to $1.27 billion, up from $794.8 million the year before.
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