Double-Take Files for IPO

Data protection specialist Double-Take Software has filed plans with the Securities and Exchange Commission to go public.

The filing late Thursday is the third this year for a storage company, which has also seen CommVault and Riverbed file IPO plans.

Double-Take, which changed its name earlier this year from NSI Software to reflect the name of its flagship product, has carved out a niche for itself by providing affordable data protection for Exchange, SQL Server and other applications for more than 10,000 customers, including half of the Fortune 500.

Despite all those customers — and a 25% growth rate in its most recent quarter — Double-Take is barely profitable. In the quarter ended March 31, the company took in $6.4 million in software license revenues and $4.3 million in maintenance and professional services sales, yet recorded net income of just $373,000. After accounting for preferred shareholders, the company had a loss of $1.7 million attributable to common stockholders. The company had $5.8 million in cash at the end of the quarter.

While Double-Take would likely raise significant cash in an IPO, it could also face higher costs meeting mandates such as Sarbanes-Oxley, which can be particularly burdensome for companies with less than $100 million in sales, although the SEC is considering easing the requirements for small public companies (see Crossroads at a Crossroads).

The company hopes to raise about $86 million in the IPO, $10.2 million of which would go to preferred shareholders. Double-Take will trade on the Nasdaq under the symbol “DBTK.”

In other storage business news, Cisco Systems announced that it is taking an 80% stake in Nuova Systems, a data center startup whose founders were previously behind Andiamo Systems, which became the basis for Cisco’s SAN switch business.

Cisco said Nuova’s efforts will complement its current data center portfolio, including its flagship LAN switching platform, the Catalyst 6500, as well as the MDS line of storage switches, SFS server networking switches and application networking solutions for accelerating applications within the data center and to the rest of the enterprise.

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