Contact: Brenon Daly
After spending the past two weeks baking off, Splunk has picked Morgan Stanley, J.P. Morgan Securities and Credit Suisse to run the books on its upcoming IPO, according to sources. The offering is expected to raise $150m for the San Francisco-based company, with the paperwork likely coming in January. Splunk will finish this year at about $110m in sales, an increase of some 65% over 2010. For 2012, projections call for the company to top $160m in sales.
The fast growth – an eager anticipation of the company’s rumored IPO – indicates just how far Splunk has grown beyond its roots as a basic event management vendor. Although most people currently know the company as a simple, easy-to-use search engine for IT data, it has been broadening the information sources it collects, including ever-increasing volumes of machine-generated data. Additionally, we recently profiled the beta release of Splunk Storm, a monitoring tool for cloud-based apps that runs on Amazon Web Services.
While the company has been fairly clearly focused on an IPO, several sources have indicated that Splunk has nonetheless attracted attention from both Dell and Oracle in recent months. However, for both financial and philosophical reasons, the company is expected to remain independent. Splunk has a number of executives that have already helped sell companies for more than $1bn, notably Hyperion Solutions, ArcSight and Opsware. Several bankers who have met with various executives say there is a sort of ‘been there, done that’ attitude toward a trade sale, and they want to build a stand-alone business for the long run. That sentiment also comes through in the rumored clearing price for Splunk: a robust $1.5-2bn.