Double-Take Software, Inc. took one more step towards becoming a public company with an S-1 filing on August 10th. The company would be the third data company to IPO this year following CommVault and Riverbed. Double-Take provides affordable backup and data recovery software to small to midsized enterprises - a market that is predicted to grow at a 25% annualized rate.

Will the company be a good buy? Well, the company has increased its revenues from $7.1m in 2001 to over $40m in 2005, although it only recently turned a profit. The company also acquired a software distributor (Sunbelt System Software) a few months ago to help expand. Sunbelt had been a long-time partner, authorized training provider and reseller for Double-Take software. The acquisition provided the company with a well qualified support and training staff as well as a stronger physical presence in Europe.

In addition to strong fundamentals, the company is also in an interesting position in their market. They are very small compared to larger competitors like EMC, and with the recent M&A activity many people thought that Double-Take would take the acquisition route instead of IPO'ing. Depending on their final valuation, the company might eventually become an acquisition target as a public company given their small market cap and strong market position.

Overall, the pricing on the IPO remains to be seen, so it is not possible to fully speculate as to how undervalued the stock is or whether or not it would be an acquisition target; however, it is definitely an IPO worth keeping an eye on.