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Red Herring: Red Hat bulks up

Nov 17, 1999, 16:05 (1 Talkback[s])
(Other stories by Matthew A. DeBellis)

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"Red Hat...sometimes is viewed as a business plan in search of a company. That perception soon may change."

"Red Hat's proposed acquisition of Cygnus Solutions will add much-needed bulk to a company that critics say has lacked real substance. The Cygnus deal may be just an appetizer. With a market valuation topping $7 million, Red Hat plans to continue consuming other companies in hopes of growing into the 900-pound gorilla of the Linux industry...."

"As a still-money-losing venture, Red Hat will dip into its well of valuable stock to pay for the ten-year-old Sunnyvale, California-based open-source software company. The Cygnus purchase follows two smaller acquisitions by Red Hat, which earlier bought a Linux services company and a Web development firm. Red Hat executives say the company's spending spree isn't over. They plan to use the company's wealth to gobble up more open-source companies in order to fill out its business model."

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