SolarWinds Sets IPO Terms

NEW YORK (Reuters) – Software company SolarWinds Inc (SWI.N) set the terms on Friday for its planned initial public offering in what could potentially be the fifth tech-flavored deal of the year.

The Austin, Texas-based network management software provider plans to raise about $127 million by selling 12.1 million shares in a price range of $9.50 to $11.50, according to a regulatory filing.

SolarWinds is the second technology-oriented company this week to set the terms for its IPO, following satellite image provider DigitalGlobe Inc (DGI.N), whose shares are expected to begin trading in mid-May.

Though SolarWinds has not chosen a debut trading date, according to one of the deal’s underwriters, the deal could price as early as mid-May, given that revealing the terms of an IPO typically presages that a deal is imminent.

“It’s the spring thaw,” said Ben Holmes, publisher at research and analytics firm “Software IPOs have generally made investors happy.”

SolarWinds registered its IPO over a year ago, suggesting that the company probably sees a window of opportunity to price its deal now that market has begun to re-open, Holmes said.

If the DigitalGlobe and SolarWind IPOs launch, they would bring to five the number of tech-related IPOs this year, following those of Chinese videogame maker Ltd (CYOU.O), online college operator Bridgepoint Education Inc (BPI.N), and language software firm Rosetta Stone Inc (RST.N).

Those three deals made April the busiest month for IPOs in the United States since July 2008.

The IPO’s underwriters, led by J.P. Morgan (JPM.N) Goldman, Sachs & Co (GS.N) and Morgan Stanley (MS.N), will have the option to buy another 1.8 million shares.

About one quarter of the shares are being sold by existing shareholders, which include SolarWinds officers and directors.

According to the filing, SolarWinds expects net IPO proceeds of $84 million and will use the money to pay down part of its long-term debts of $93.9 million, for a payout to its original shareholders and for working capital and acquisitions.

In the first quarter of 2009, SolarWinds had sales of $24.1 million, up 18 percent over the year-earlier period, and net income of $5.99 million.

SolarWinds has applied to list on the New York Stock Exchange under the symbol “SWI.”

(Reporting by Phil Wahba; editing by Gunna Dickson)