Infinera to raise more funds

Infinera is looking to raise more than $100 million in a new public offering of stock, the company announced late last week.

The seven-year-old optical equipment vendor, which raised about $190 million in its initial public offering this summer, intends to sell 5 million more shares of common stock, while existing shareholders are offering an additional 5 million (the proceeds of which Infinera won’t see). Based on the stock’s price at the end of the day last Thursday, $23.97, Infinera expects to raise about $113.4 million, after expenses are paid. But if the company’s underwriters exercise their options to buy additional shares in conjunction with the offering, the company could net up to $147.7 million, it said.

“We intend to use the net proceeds to us from this offering for working capital and other general corporate purposes, including to finance our growth, develop new products, fund capital expenditures, or to expand our existing business through acquisitions of other businesses, products or technologies,” Infinera said in a regulatory filing. “However, we do not have agreements or commitments for any acquisitions at this time.”

The company reported nearly $108 million in revenue for the first half of this year and a net loss of nearly $46 million. As of the end of the second quarter, the company reported more than $198 million in cash and equivalents, $172 million in working capital, nearly $395 million in total assets and $4.5 million in debt.

After shipping its product for less than three years, Infinera was named by Ovum-RHK this summer to be the leader of the “multi-reach” optical equipment market, serving a range of network needs. Its biggest customer is Level 3 Communications.

"[Infinera] could certainly use the extra [funds] for acquisitions, but it could just as easily use it for further expansion of its in-house R&D, sales, marketing, and manufacturing capabilities," said Dana Cooperson, Ovum-RHK’s vice president of network infrastructure, in an email. "It's involved in lots of initiative to expand its current DTN business, like 40 Gb/s and 100 Gb/s R&D. It is likely also to push into metro applications, and it could further develop the switching capabilities of its products. I don't think it has an overwhelming need to acquire anyone at this point."

Goldman Sachs Lehman Brothers, Morgan Stanley, J.P. Morgan, Thomas Weisel Partners and Jefferies are all participating in the new offering.