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BlueArc waits until next year

 Three months after filing to become a public company, NAS vendor BlueArc has pushed back its scheduled IPO until 2008 according to industry sources.

Citing SEC regulations, BlueArc declined to comment on its IPO schedule. But several industry and financial analysts familiar with the company say its bankers have decided to hold off on going public. BlueArc filed to for its IPO Sept. 7, and it normally takes a company about three months to begin trading shares as a public company. But BlueArc has yet to set its expected share range or go on its roadshow that precedes an IPO. There is usually a gap of at least two weeks between the share range and IPO, which means BlueArc would run smack into the holiday season if it decided to become public by the end of 2007.

It’s not clear why BlueArc decided to wait, but it’s likely that the company and its bankers anticipate a lower price for shares than they originally expected if they go public now.

“I’m sure market conditions haven’t helped,” said a banker for a securities firm who is not involved with BlueArc’s IPO.

A financial analyst who follows storage said investors “are doing more due diligences on IPOs now,” and said it could hurt BlueArc that the stock prices of storage systems companies Isilon and Compellent have dropped drastically since their recent IPOs. The analyst said BlueArc might want to show another quarter of solid growth to help its case. There is also the possibility of an acquisition. IP SAN vendor EqualLogic had filed for an IPO before Dell scooped it up for $1.4 billion last month. Storage insiders agree that Hitachi Data Systems is the most likely suitor because it has an OEM deal to sell BlueArc NAS systems and an equity stake in the company.

Even without BlueArc, 2007 was an active year for storage IPOs. Pure storage companies Compellent, 3PAR and Data Domain all went public, along with EMC’s partial spinoff of server virtualization company VMware and InfiniBand suppliers Mellanox and Voltaire.

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I can't see Hitachi buying BlueArc - they fall in and out of bed with all the NAS vendors and wonder why they get no market penetration at all. Most savvy buyers will just put a NTAP vfiler in front of the Hitachi if they really want unified storage. jmtc