Fortinet IPO prices above range

NEW YORK (Reuters) - Network security provider Fortinet Inc, whose products integrate firewalls, Web-filtering and spam-filtering, priced shares in its initial public offering above expectations on Tuesday, in the latest sign of the return of venture capital-backed deals.

The 12.5 million shares priced at $12.50 according to an underwriter, who declined to be identified, and the IPO raised about $156.3 million. Fortinet had expected shares to price between $9 and $11, according to a regulatory filing with the Securities and Exchange Commission.

So far this year there have been 10 venture capital-backed IPOs valued at a combined $1.4 billion. There were only six VC-backed IPOs in 2008, totaling $470.2 million, according to Thomson Reuters data.

Silicon Valley-based Fortinet on Monday raised the number of shares it planned to sell to 12.5 million from 12 million on strong interest from investors, with the additional shares all being offered by the selling stockholders who offered 6.7 million shares rather than 6.2 million.

The company's executives and directors are selling 2.4 million shares while venture backers Redpoint Ventures and Meritech Capital are offering a combined 1.5 million shares in the offering.

Fortinet will raise more than $50 million, which it has said it will use for working capital, developing new products and potential acquisitions, among other things.

Fortinet had sales of $181.4 million in the first nine months of 2009, up 18.8 percent over a year earlier, with a profit of $16.2 million.

The IPO's lead underwriters are Morgan Stanley (MS.N), J.P. Morgan Securities & Co (JPM.N) and Deutsche Bank Securities (DBKGn.DE). They have the option to buy an additional 1.875 million shares.

Fortinet will debut on the Nasdaq on Wednesday under the ticker "FTNT."

(Reporting by Clare Baldwin and Phil Wahba; Editing by Gary Hill)