PC component manufacturer Corsair might be rated highly, but financial woes are giving it cause for concern.
CNN Money on Friday said that it had unearthed a regulatory filing detailing potential buyout partners who were looking at the company. Corsair reported $19 million in net income and $455 million in revenue for the financial year ending 2011. In Q1 2012, net income from sales was $3 million from revenue totalling $132 million. If the trend continues, CNN Money expects Corsair’s net income for the 2012 financial year to just break over $12 million, a potential 36% drop year-on-year.
The company has been contemplating a public offering, trading shares in the New York Stock Exchange to raise a potential $75 million to fund new products and accelerate growth. However, they announced on 24 May 2012 that they would be delaying their IPO (Initial Public Offering) and the company “will re-launch when equity market conditions are more favorable.”
“While we do intend to expand our capital base through public capital markets, our existing capital structure and balance sheet provides sufficient capital to enable continued investment in our brand strength, products and people,” said Andy Paul, Co-Founder, President and CEO of Corsair, when announcing the IPO delay.
However, CNN Money’s filing discovery mentioned that Corsair is now in talks with another company in Fremont, California, to possibly buy it outright. Francisco Partners, an American private equity firm that invests money for shareholders into technology and technology-enabled business services, was part of the group lead by Blackstone Group, another equity firm, to assist Dell Corporation in exiting the stock market by way of a buyout.
Francisco Partners may be able to raise enough funds to allow the company to continue with its IPO and ride the rough seas of the stock market until their shares stabilise in price and the company is able to stand its ground.
Neither Corsair nor Francisco Partners have come forward to deny the rumors.