Archive for August 24th, 2010

Here is an article from WSJ Venture Dispatch.

“3Par’s IPO in November 2007 was held up as yet another strong offering during a year that saw 74 venture-backed companies go public. The IPO, which priced above market estimates at $14 a share and saw a 13% gain on opening day, also was billed as a big exit for venture capitalists.

But the market soon tanked, bringing down 3Par’s stock with it – by spring-time it was fluctuating between $6 and $9, and its venture investors were nowhere near exiting this company. Typically, VCs begin unloading some shares once the 180-day lock-up period ends, but with the stock-market in flux, three of 3Par’s main venture backers mostly stayed put.

Nearly three years later, Mayfield Fund, Menlo Ventures and Worldview Technology Partners still own significant chunks of 3Par stock, and that patience may pay off mightily – thanks to the bidding war between Dell and Hewlett-Packard.

Last week, Dell agreed to acquire 3Par for $1.13 billion, or $18 a share, but Hewlett-Packard has swooped in with a $24-a-share offer that values 3Par at $1.6 billion. The bidding has caused 3Par’s stock to rocket upward to more than $25 today, finally bringing the stock above its IPO price.

This is especially good news for limited partners in Mayfield Fund and Worldview Technology Partners, which first invested in 3Par in 1999. Together, these three firms and a number of others invested a total of $183 million into 3Par over the years.

Prior to these buyout offers, 3Par’s venture investors were left with a difficult choice between selling out for liquidity now or waiting for better returns down the road. Menlo Ventures, which led the company’s 2004 recapitalization, and Worldview Technology Partners, which first invested alongside Mayfield Fund in the 1999 Series A round, have both held onto their entire stakes and today own 13.4% and 12.2%, respectively. These investors declined to comment or did not respond to requests for comment.

Mayfield Fund, which was at the time of the IPO, the company’s largest shareholder, has been slowly selling its stake in the business over the last two years at prices ranging between $9.22 and $12.30, which was near the price prior to the announcement from Dell. That firm currently owns about 9.9% of 3Par.”

Read the full article here.

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