UPDATE 1-Palo Alto Networks picks IPO underwriters-sources

Thu Mar 8, 2012 1:59pm EST

* Underwriters include Morgan Stanley, Goldman, Citi

* Underwriters are some of company's biggest customers

* ServiceNow picks MS, Citi, Deutsche to underwrite

By Nadia Damouni

NEW YORK, March 8 (Reuters) - Palo Alto Networks, a security software maker, hired Morgan Stanley, Goldman Sachs and Citigroup to lead its initial public offering, which is expected this year, three sources close to the matter said.

The technology company, which has about $700 million in annual revenue, picked banks that are its largest financial customers to underwrite its IPO, these sources said.

Palo Alto Networks, Morgan Stanley, Citigroup and Goldman Sachs all declined to comment.

Meanwhile, technology management software maker ServiceNow also chose some of its largest financial customers to underwrite its IPO, including Morgan Stanley, Citigroup and Deutsche Bank .

In February, sources said Goldman Sachs was one of the underwriters of the ServiceNow IPO. But this week, two sources said it is not among the underwriters.

ServiceNow was not immediately available for comment. Deutsche Bank declined to comment.

Palo Alto Networks and ServiceNow are among a slew of fast-growing technology companies that are preparing to go public on the heels of Facebook's $5-billion filing, sensing a window of opportunity as the stock market rallies.

These companies are expected to each be valued at $1 billion and higher, sources previously told Reuters.

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