VA Linux is to buy Andover.net, owner of Slashdot.org, Freshmeat.net and a clutch of disparate Linux web sites, for $1 billion in shares and some cash.
Speaking at LinuxWorld Expo, Larry Augustin, VA Linux CEO, said the company would pull the Andover sites into a "great developer community and resource online to drive Open Source".
Well it’s certainly a way of building bulk rapidly -- so far as Linux-friendly eyeballs are concerned. The combined web sites will account for "two thirds of the total traffic of major Open Source sites, putting the combined network in the top 100 web destinations world wide". Andover.net brings 50 million page impressions per month to the party.
In terms of the acquisition price, the deal's a more questionable proposition. Andover is a titchy company, turning over $2.1 million and losing $15.7 million (IPO costs account for most of the red ink) in Q3. [break] Zie voor meer info ook de press release: [/break] Feb. 3, 2000--VA Linux Systems (Nasdaq:LNUX), a leading Linux and Open Source solutions company, today announced the acquisition of Andover.Net (Nasdaq:ANDN), the leading Linux destination on the Internet, in a transaction that could revolutionize the Linux market space. VA Linux will own and operate the most popular Open Source developer network. This reinforces VA Linux's position as the only public company in the United States to offer exclusively Open Source systems, software, service and Web-based developer solutions.
Under the terms of the merger agreement, which was approved by the Boards of Directors of each company, each share of Andover.Net Common Stock will be exchanged for 0.425 of a share of VA Linux Systems Common Stock, reduced by an aggregate of $60 million in cash payments to Common Stock holders of Andover.Net.
The transaction is expected to be completed during VA Linux Systems' third fiscal quarter and will be accounted for as a purchase. Based upon analyst's estimates, the Company expects the transaction to be accretive to revenue and gross margin this year.