With broader market jitters keeping the U.S. IPO market at a standstill since mid-August, Ubiquiti (UBNT) is seeking to end the drought with a $148 million deal scheduled on this week's IPO calendar. Founded by a former Apple engineer, Ubiquiti sells wireless networking equipment to network operators and Internet service providers in underserved and emerging markets. The company plans to sell 7 million shares (66% sold by existing shareholders) at a price range of $20-$22 per share. UBS (UBS), Raymond James (RJF) and Deutsche Bank (DB) are the bookrunners on the offering, which is set to list on the Nasdaq. [Update: Ubiquiti priced Thursday night at $15/share and is due to begin trading Friday - Ed.]
Ubiquiti primarily sells radios and antennas used in wireless backhauls and base stations as well as accompanying software. Its customers typically lack the capital to license radio frequency spectrum and therefore use unlicensed spectrum, and Ubiquiti's products are designed to address many of the complexities of unlicensed spectrum (e.g. noise, interference and variability). Additionally, it sells its products at prices significantly below those of competing solutions. This focus on underserved customers, many in emerging markets, has helped Ubiquiti gain traction in a competitive market. More recently, the company has broadened its product portfolio by launching enterprise networking and video surveillance solutions.
(Read more about Ubiquiti's business, risks and outlook.)
Ubiquiti is attempting to be the first company to go public in the U.S. since Tudou (TUDO) completed its IPO in mid-August. As a result, it will act as a litmus test of risk appetite among IPO investors. Given the nervous state of the broader equity markets, as well as recent weak trading by some of Ubiquiti's peers, investors will be cautious approaching this deal. That said, Ubiquiti's fast growth and strong margins may be enough for it to end the IPO drought