Wilson Sonsini Goodrich & Rosati Chairman Larry Sonsini ()
PALO ALTO ­— Arista Networks, an equipment maker that’s been embroiled in an unusual suit with its cofounder, turned to Wilson Sonsini Goodrich & Rosati for legal counsel on its $226 million initial public offering. Latham & Watkins advised the underwriters.
Despite being in the spotlight in recent weeks over the heated face-off between its cofounders, Arista priced above its expected range and soared on its debut, closing up 28 percent on its first day of trading Friday. It offered 5.25 million shares at $43 apiece.
Evidently, the company’s performance and prospects eclipsed concerns about how the case will ultimately play out. Arista booked sales of $361 million last year, earning net income of $42 million.
The company, which makes data-switching equipment, was founded in Santa Clara in 2004 by a pair of Silicon Valley veterans, Sun Microsystems cofounder Andy Bechtolsheim and Stanford professor-cum-entrepreneuer David Cheriton, as well as Chief Technology Officer Ken Duda.
Around the same time, Cheriton founded OptumSoft Inc., a software development company, and helped ink a licensing agreement between his two businesses that would permit Arista to use OptumSoft’s technologies. For many years, the companies seemed to peacefully coexist with the agreement. For a time, they even shared offices.
But in March, Cheriton left Arista’s board, just a few weeks before Arista made its IPO plans known. And not long after Arista filed its registration statement, OptumSoft filed a suit, alleging a contract breach. (It first sent notice to Arista in November 2013.) Arista has turned to Wilson Sonsini for help with the suit, which it’s called a “Hail Mary” on the part of a floundering business.
The quarreling cofounders, along with Arista’s CEO, continue to hold more than 58 percent of the company, which has complicated arguments that Cheriton and OptumSoft sought to derail the IPO and the payouts it would enable.
The Wilson Sonsini team advising on the IPO included firm chairman Larry Sonsini, partners Mark Baudler and Raj Judge, and associates Andrew Hoffman, Kyle Chin and Kat Ferris.
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