(Reuters) - Shares of Barracuda Networks Inc (CUDA.N), a data storage and internet security company, jumped as much as 32 percent in their debut, underscoring a growing interest in the red-hot cyber security market.
The company raised about $75 million after its offering of 4.1 million shares was priced at $18 per share, the low end of the expected price range.
Campbell, California-based Barracuda’s shares opened at $22.20 and touched a high of $23.77 in morning trading, valuing the company at $1.19 billion.
Barracuda uses cloud-based technologies to provide security and data storage products. Its rivals include Symantec Corp (SYMC.O), Check Point Software Technologies Ltd (CHKP.O), CommVault Systems Inc (CVLT.O) and Intel Corp’s (INTC.O) McAfee unit.
Shares of FireEye Inc (FEYE.O), Barracuda’s closest competitor, have surged 80 percent since their debut in September.
Shares of cybersecurity firms are in high demand because of the scarcity of listed companies in that market and a spike in internet hacking attacks and other online crimes.
Businesses are increasingly looking to cyber security firms to bolster their anti-virus defenses.
“Cybersecurity has really gone to the top of the IT priority list and vendors, both public and private, are going to benefit over the coming years from that demand,” said FBR Capital Markets analyst Daniel Ives.
Research firm Gartner expects the market for software firewall business alone to almost double in value to $8.7 billion between 2011 and 2016.
Barracuda’s IPO filing with the U.S. Securities and Exchange Commission shows that its revenue nearly doubled in the last five years. The company was profitable for the first four years, but posted a loss for the latest fiscal year ended February 28 due to a sharp rise in expenses.
Barracuda’s biggest shareholders include technology-focused private equity firm Francisco Partners, which has a 24 percent stake, and venture capital firm Sequoia Capital, which owns a 16 percent stake.
Barracuda is the latest in a string of successful public offerings from technology companies.
Year to date, 2013 has been the strongest for IPOs in the United States since 2007, with more than 178 companies going public, according to Thomson Reuters data.
Equity markets are climbing and investor uncertainty has subsided, at least for now, over the U.S. debt ceiling and the ensuing political gridlock.
Shares of Container Store Group Inc (TCS.N) doubled on their first day of trading on November 1, following strong debuts from more than half a dozen companies, including restaurant chains Noodles & Co (NDLS.O) and Potbelly Corp (PBPB.O) and software company Benefitfocus Inc (BNFT.O).
Morgan Stanley, JPMorgan Chase and Bank of America Merrill Lynch were the lead underwriters for Barracuda’s IPO.
Reporting by Tanya Agrawal and Neha Dimri in Bangalore; Editing by Maju Samuel