Pure Storage prices IPO in line with expectations
(Adds more details, Digicel IPO, market background)
By Lauren Hirsch
Oct 6 (Reuters) - Data storage company Pure Storage Inc priced its initial public offering in line with its expectations on Tuesday, a key hurdle for the market after several companies discounted and even downsized their IPOs amid weak demand.
Pure Storage priced its IPO at $17 per share, the middle of its indicated $16 to $18 per share range, according to people familiar with the matter. It sold 25 million shares, raising $425 million.
The company's listing comes a week after the IPO market flubbed its first major test since U.S. stocks plummeted this August. Performance Food Group Co, surgical center operator Surgery Partners Inc and biotechnology companies Edge Therapeutics Inc, Mirna Therapeutics Inc and Novocure Ltd all priced their IPOs last week at steep discounts to their indicated range.
Earlier on Tuesday, mobile phone service provider Digicel Group Ltd, owned by Irish billionaire Denis O'Brien, announced its decision to withdraw its plans to go public, citing "current conditions, particularly in emerging markets."
The Bermuda-based company was slated to have one of the largest IPOs of the year, raising as much as $2 billion.
Two large high-profile companies eyeing a public listing next week, payment processing company First Data Corp and supermarket operator Albertsons Companies Inc, were watching Pure Storage's pricing to get the latest gauge of the market.
To be sure, Pure Storage's investors hoped they would have done better by now. The company will be valued at around $2.7 billion in the IPO, yet it raised money last year from investors that included T. Rowe Price, Tiger Global Management and Index Ventures at a roughly $3 billion valuation.
Pure Storage is a memory storage company that offers flash memory, rather than disk memory or a combination of flash and disk. Proponents of flash storage argue that the memory system is faster and less susceptible to mechanical failures.
Other all-flash storage companies include privately held start-ups Kaminario and SolidFire.
Founded in 2009, Pure Storage has focused on growth over profitability, and has not turned a profit since inception. Its revenue has risen about 308 percent in the fiscal year ending January 2015, growing from $43 million to $175 million.
Shares in Mountain View, California-based Pure Storage are expected to start trading on Wednesday and list on the New York Stock Exchange under the symbol "PSTG."
Morgan Stanley, Goldman Sachs Group Inc, Barclays Plc and Allen & Company LLC are lead underwriters of Pure Storage's IPO.
(Reporting by Lauren Hirsch in New York; Editing by Tom Brown)
