Red Hat, the leading Linux distributor, announced on April 10 that it has entered into a definitive agreement to acquire open-source Java middleware company JBoss. JBoss has been rumored to be on the acquisition block for months. Earlier this year there was much speculation that Oracle was going to acquire the Atlanta-based JBoss, but JBoss CEO Marc Fleury said he had no immediate plans to sell the company. Red Hat will pay at least $350 million for JBoss. That will be made up of 40 percent cash and 60 percent Red Hat stock. An additional $70 million may be paid depending upon JBoss' financial performance. Oracle had been alleged to have been looking to pay from $300 million to $480 million for JBoss.
The deal is expected to close in May. If completed as planned it will add to Red Hat's earnings next year. In early Monday morning trading, the market enthusiastically greeted the proposed deal with a jump of almost 10 percent on extremely high volume. "Red Hat and JBoss are fully aligned around the belief that the open source development model continues to change the economics of enterprise IT in favor of the customer, and we truly believe in the potential of software innovation, once freed from the fetters of proprietary development, " said Matthew Szulik, Red Hat chairman and CEO, in a statement.
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News source: eWeek
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