BW: Red Hat To Acquire Cygnus and Create Global Open Source Powerhouse

“Red Hat…and privately-held Cygnus Solutions, today announced
that they have signed a definitive merger agreement, whereby
Red Hat will acquire Cygnus in a transaction valued at $674
million based on Red Hat’s Friday, November 12 closing price.
The merger will create an open source powerhouse to accelerate and
support the rapidly growing adoption of Red Hat Linux and open
source solutions in enterprise and Internet applications and a new
generation of post-PC-centric computing. Red Hat expects the merger
to close by January 27, 2000.”

“The transaction will be completed in a stock for stock merger
in which Red Hat will issue up to 6,624,344 shares for all of the
outstanding securities of Cygnus. The transaction will be accounted
for under the pooling of interests method. The transaction is
subject to approval by Cygnus’ shareholders, the expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act and other customary closing conditions. Matthew Szulik, the
president of Red Hat, will lead the combined companies as president
and CEO.”

“The merger will make Red Hat, Inc. the largest company in the
world dedicated to providing open source technology, information
and services, offering the full spectrum of open source software
and support — from enterprise deployments to embedded and
handheld platforms. End users worldwide will benefit from the
companies’ combined, unmatched technical expertise and a wide-array
of industry partnerships with major computing vendors like Compaq,
Dell, IBM, Intel and Hewlett-Packard to support their
rapidly-growing adoption of open source solutions.”

Press Release