Caldera Systems has acquired Santa Cruz Operation's (SCO's)
server division in a deal that leaves the veteran Unix firm facing
an uncertain future and Unix in Caldera's hands.
SCO's server software and professional services divisions has
been bought for 17.54 million shares (28 per cent of the company)
plus $7m cash. Caldera's morning share price of around $7 makes the
deal worth $130m, although the pair claim it is worth nearer $300m.
Stock in both companies has been in free fall in recent months.
Caldera will run the OpenServer Unix-on-Intel operating system,
which generated just $11.1m revenue in the third quarter of fiscal
2000, as a separate unit through new holding company Caldera Inc.
It will offer what it bills as the industry's first comprehensive
open internet platform, combining Linux and Unix server
Ransom Love, president and chief executive at Caldera,
stressed in a statement that the new firm will support both Linux
and Unix industries and communities and offer support, training and
However, under the terms of the deal, SCO, after expenses, will
receive around 55 per cent of future OpenServer revenues plus an
$18m loan from one of Caldera's major investors, The Canopy
SCO last week reported a third quarter loss of $19.24m, three
times that expected, and appears to be haemorrhaging cash. It said
it will use the new funds to invest in its Tarantella software,
which it retains along with its Unix intellectual property rights.
Last week, the firm revealed that Tarentella revenues amounted to
just $2.5m in the third quarter.
Doug Michels, SCO chief executive, will join the Caldera Inc
board, and fellow senior executives Jim Wilt and David McCrabb will
also take positions at the new company. Ray Andersen may possibly
join at a later date.
SCO's price has fallen from over $31 to under $4 since the start
of the year, and it has being denying analysts' predictions of a
gloomy future since 1998. Caldera shares have fallen from a top
price of $33 in April to $7.
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