Shares of network security systems maker, Fortinet, Inc. (Nasdaq: FTNT) were up as much as 22 percent from Friday’s closing price in morning trading on Monday, after rumors of a takeover approach from International Business Machines Corp. (NYSE: IBM).

Although it has not yet been made public, discussions between the two companies may be at an advanced stage, though a deal could still fall apart, Bloomberg reported. IBM approached Fortinet six to eight weeks ago, a source told Bloomberg. The world’s largest computer services provider has spent more than $20 billion on 100 acquisitions since CEO, Sam Palmisano took over in 2002.
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Fortinet focuses on all-in-one network security systems, and has customers ranging from small businesses to large phone carriers. To date, Fortinet has shipped more than 500,000 appliances to more than 75,000 customers worldwide. The Sunnyvale-based company was founded in 2000, and went public last year.

The company was taken public by Morgan Stanley, J.P. Morgan and Deutsche Bank on November 17, 2009 and raised $156 million in gross proceeds. Fortinet rose 33 percent on its first day of trading and continued upward, ending the year up 41 percent, making it one of the top ten performing IPOs of 2009.

Fortinet’s profit increased almost two-fold to $14 million or 17 cents per share in the third quarter, up from $6.4 million, or 10 cents per share a year ago. Sales in the quarter were $85 million, a 29 percent increase over the same quarter last year. Analysts polled by Thomson Reuters had forecast earnings of 11 cents per share.

“We are very pleased with our third quarter results, which marks the fourth consecutive quarter as a publicly traded company that we have exceeded our expectations in terms of billings, revenue and profitability,” said Fortinet’s chief financial officer, Ken Goldman in a statement.

Shares of Fortinet, Inc. are up more than 97 percent over the past three months.