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Entropic Communications Files for $100M IPO

Entropic Communications, a developer of home-networking-semiconductor technologies, filed a registration statement with the Securities and Exchange Commission Friday for an initial public offering that the company said could raise up to $100 million.

The San Diego-based company designs and develops systems solutions for networking home-entertainment devices, and it is a founding member of the Multimedia over Coax Alliance (MoCA). Founded in 2001, Entropic had 220 full-time employees as of June 30.

Entropic, in its IPO filing, said it has more than 55 customers worldwide, including Actiontec Electronics, Jabil Circuit and Motorola. The company also has established relationships with service providers including EchoStar Communications, Verizon Communications and Japanese cable operator Jupiter Telecommunications.

The company had $41.4 million in revenues and a net loss of $7.2 million for 2006, compared with revenues of $3.7 million and a $12.3 million net loss the year before.

Entropic recently acquired RF Magic, a developer of broadband-radio-frequency systems on a chip. In 2006, RF Magic generated sales of $26.2 million and $1.5 million in profit, according to the filing. For the three months ended March 31, Entropic and RF Magic together generated pro-forma revenues of $29.2 million.

In the IPO filing, Entropic noted that more than 91% of its revenue comes from 10 customers. For the year ended Dec. 31, 2006, Actiontec, Motorola and CalAmp accounted for 31%, 23% and 11%, respectively, of the pro-forma revenues of Entropic and RF Magic, according to the company. In the first quarter of 2007, Motorola, Actiontec and Marubun/Arrow (HK) accounted for 32%, 24% and 12%, respectively, of the companies’ combined revenues.

To date, only one major service provider -- Verizon -- has publicly announced its intention to use the MoCA standard for home networking in its FiOS TV deployment.

Entropic and RF Magic have done most of their business overseas. Revenues outside of the United States comprised 64% of Entropic’s total revenues for the first quarter and 49% for 2006. The company said it is focused mainly on Japan, Korea, China and Europe.

Credit Suisse Securities and Lehman Bros. will be the lead underwriters of the proposed IPO, with Thomas Weisel Partners, JMP Securities and ThinkEquity Partners as co-managers.

Entropic plans to list its stock on the NASDAQ exchange under the symbol "ENTR," the filing said.