Proposed Ticker: (DBTK)
Underwriters: Cowen & Co., Thomas Weisel, CIBC, Pacific Crest
Maximum Offering: $86.25 million
Business Overview (from S-1)
Double-Take Software develops, sells and supports affordable software that reduces downtime and protects data for business-critical systems. We believe that we are the leading supplier of replication software for Microsoft server environments and that our business is distinguished by our focus on software license sales, our productive distribution network and our efficient services infrastructure. Organizations of all sizes increasingly rely on application systems and stored electronic data to conduct business, new regulations have increased data protection requirements for businesses in many industries, and new threats of business disruption from events such as 9/11 and Hurricane Katrina are causing more organizations to re-examine their data and server recovery strategies. Our software responds to these needs by continuously replicating changes made to application data on a primary operating server to a duplicate server located on- or off-site. Because the duplicate server can commence operating in place of the primary server at almost any time, our software facilitates rapid failover and application recovery in the event of a disaster or other service interruption.
Financial Highlights: Revenues consist of software and maintenance revenues. For 2005, total revenues were $40.7 million, 64% of which were from software. Maintenance revenues have trended up from 32% to 36% of revenues between 2003 and 2005; for the first quarter of 2006 they were up to 40% (over 38% Q1 2005). Cost of revenue on the maintenance portion ranges from 11-13%, and on the software portion up to 2%. The company's net loss dropped from $8 million in 2004 to $3.7 million in 2005. For the first quarter of 2006, the company recorded a net gain of $370k, up from the same quarter 2005 net loss of $1.5 million.
Use of Proceeds: $10.2 million will fund a payment to Series B Preferred shareholders; the rest is for working capital and general corporate purposes.
Key Competitors: EMC via Legato acquisition (NYSE:EMC), Neverfail (private), Symantec via Veritas acquisition (NASDAQ:SYMC) and CA via XOsoft acquisition (NASDAQ:CA).
Major Shareholders: ABS Capital currently holds 56% of the company; J. & W. Seligman & Co and LSC Fund hold an additional 6% each.