Pasadena-based Guidance Software Inc., which makes software used for digital forensics and investigations, is going public.
The company would like to raise as much as $80 million through its initial public offering, which will be listed on the Nasdaq under the symbol GUID.
Morgan Stanley, Lehman Bros., Wachovia Securities and A.G. Edwards are underwriting the IPO. The firm offered no indication on the number of shares to be offered.
Guidance’s flagship product is EnCase Enterprise, which helps search, collect and analyze digital evidence, such as from servers, desktops and laptops. E-investigations have in the past been conducted by highly paid consultants, but EnCase is much more streamlined and cost-effective. The software is also able to uncover deleted and concealed data.
The company has been involved in a number of high-profile investigations, here and abroad. When Al Qaida leader Abu Musab al-Zarqawi was killed in Iraq, EnCase software was used to search the hard drive of the computers in the house where he had been staying. EnCase was also used to collect evidence in the murder trial of Scott Peterson.
This is definitely a growth industry. Increasing scrutiny on corporate accounting and corporate integrity witness Hewlett Packard should create more opportunities. In addition, there is a pending amendment to the Federal Rules of Civil Procedure, which will require litigants to discuss the production of electronic evidence. There will also be an obligation to preserve and identify electronic evidence.
Guidance, which lists former CIA director George Tenet and former In-Q-Tel President Amit Yoran on its board, reported 2005 net income of $1.6 million compared with a net loss of $792,000 in 2004. Revenues in 2005 were $39.5 million. It has posted revenues of $24.5 million for the first part of 2006, a 46 percent increase over the same period a year ago.
Is Price Right?
Napster Inc. hired UBS Investment Bank last week to scout out possible buyers, or at least potential interest, in the music-sharing site.
To quote a line from a Chicago song one of Napster’s older subscribers might download, “Does anybody really care?”
L.A.-based Napster has more than 500,000 subscribers and recently announced a shift to an ad-based business model. The company said third party interest sparked the move, but officials wouldn’t divulge who or what they were actually interested in. If analyst reports are to be believed, a few potential buyers have surfaced, including Amazon.com Inc., Real Networks Inc., San Disc Corp. and the company mentioned in seemingly every Internet deal, Google Inc.
There’s a reason none of these potential suitors is likely to be particularly ardent, however: the price.
With the company’s healthy cash position of $97 million at the end of the first quarter and annual revenues in excess of $100 million, Napster will easily be able to demand well into the hundreds of millions for the service.
Chairman and Chief Executive Chris Gorog toes a party line when discussing options.
“Our goal is to enhance shareholder value which could potentially lead to a new strategic partnership or the sale of the company,” Gorog said in a statement. “But in any event our primary focus will remain on growing Napster.”
Napster, which has already survived a body blow from Apple Computers Inc. and its iPod, is preparing to do combat with Microsoft Inc. and its Zune portable media player launch.
Mortgage Matchmaker
LeadPoint Inc., the L.A.-based exchange marketplace founded two years ago, is hoping its unique approach eventually creates allows it to challenge its larger rivals, LendingTree.com and LowerMyBills.com.
LeadPoint allows real estate buyers and sellers to exchange high-value leads with computerized efficiency through an online auction market. LeadPoint differs from other companies of its ilk because its proprietary technology controls lead flow as well as verifying and rating buyer and seller quality. LeadPoint operates as the arbitrator, bringing buyers and sellers together and allowing them to exchange in a fair market environment.
“Any lead on a global basis can be exchanged,” said LeadPoint Chief Executive Marc Diana. “We provide the service to take that information and match it to lenders. We’re monetizing it.”
LeadPoint was created to find leads in the housing market on mortgages, but has since expanded into debt and student loans.
LeadPoint currently has more than 1,000 customers trading more than 5,000 leads per day. Diana said that the company has seen 10 percent revenue growth each month over the last two years.
LeadPoint was founded in 2004 by Diana and Per Pettersen, founder and chief executive of Commission Junction, which recently sold to ValueClick.
The company hasn’t stirred much attention or publicity in its first two years, but Diana is convinced that its day is coming.
“I’d say that we’re now peeking our heads above that radar screen,” Diana said. “The 1,000 customers we have are incredibly happy with the platform. We’re just frankly looking to make a little noise and let the world know what we’re up to.”
Dynamic Diodes
Diodes Inc., a Westlake Village-based company that supplies discrete and analog semiconductors to electronics and consumer markets, has been ranked No. 82 on the Fortune 500 list of “100 Fastest-Growing Companies.”
“To be named among such leading companies as Yahoo, SanDisk and Genentech is a major honor and accomplishment for Diodes,” said President and Chief Executive Dr. Keh-Shew Lu. Earlier, the firm was ranked No. 26 in Business 2.0 magazine’s list of “100 Fastest Growing Tech Companies.”
Dan Cox can be reached at (323) 549-5225, ext. 230, or at
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