NEW YORK Arista Networks, a maker of network switches that competes with much bigger rival Cisco Systems Inc, has selected banks to lead a proposed initial public offering for next year, according to people familiar with the matter.
Morgan Stanley, Citigroup Inc and Credit Suisse Group will lead the offering that is at an early stage of planning, the people said on Tuesday, asking not to be named because the matter is not public.
Representatives for Morgan Stanley did not immediately respond to requests for comment. Arista, Citigroup and Credit Suisse declined to comment.
The Santa Clara-based company could have a valuation of around $2.5 billion, according to some industry analysts who attended a presentation the company made in September. Arista's 2013 revenue is likely to exceed $300 million, ISI Group analyst Brian Marshall said.
Arista is one of several high-profile technology companies gearing up for an IPO, on the heels of a successful debut by Twitter Inc last week, which raised more than $1.8 billion for the microblogging company.
Reuters reported on Friday that fast-growing data storage company Box has selected Morgan Stanley, Credit Suisse and JPMorgan Chase & Co to lead a proposed IPO that could raise around $500 million.
Arista was started in 2004 by German-born Andy Bechtolsheim and Canadian native David Cheriton, a University of Stanford computer science professor, with $100 million in funding.
The company introduced its first products, used in high frequency trading, in 2008. It has also gained traction with new uses for its products such as cloud computing, big data and software defined networking.
It partners with major technology companies including VMware Inc, Microsoft Corp, SAP AG as well as Palo Alto Networks Inc, Riverbed Technology Inc, Splunk Inc and F5 Networks Inc.
Both Bechtolsheim and Cheriton have a history of launching successful companies, and are known to have a knack for smart investments - they were the initial investors in Google.
Bechtolsheim co-founded Sun Microsystems in 1982. It was bought by Oracle in 2010.
Cheriton and Bechtolsheim also founded switching technology company Granite Systems, which was acquired by Cisco in 1996. They also started server-technology firm Kealia, which was bought by Sun Microsystems in 2004.
Both men worked with Cisco for some years.
It was Cisco they looked to when they needed a chief executive for Arista, and they attracted Jayshree Ullal - a 15-year Cisco veteran who was responsible for data center switching and services.
All of Arista's senior management, with the exception of its chief financial officer and its senior vice president of global sales operations, consists of former Cisco employees. Long-time Cisco veterans, Charlie Giancarlo and Dan Scheinman, also sit on the company's board.
(Corrects first name of Arista board member to Dan in last paragraph)
(Reporting by Nicola Leske and Soyoung Kim; Editing by Gerald E. McCormick, Bernard Orr)