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News > Deals
Red Hat acquires Cygnus
November 15, 1999: 10:25 a.m. ET

Companies merge in $674M deal; plan to further open source development
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NEW YORK (CNNfn) - Red Hat Inc., the leading U.S. distributor of the Linux computer operating system, is buying privately held Cygnus Solutions in a stock swap deal worth $674 million, the companies said Monday.
     Sunnyvale, Calif.-based Cygnus Solutions provides development tools and platforms.
     The price tag is based on Research Triangle Park, N.C.-based Red Hat's Nov. 12 closing price of 101-13/16. Under terms of the agreement, Red Hat will issue up to 6,624,344 shares for all of the outstanding securities of Cygnus. The deal will be accounted as a pooling of interests and is subject to approval by Cygnus' shareholders.
     The merged companies said they plan to further the development of open source technology, which provides the inner workings of software for free to developers. Open source is the most popular distribution method among U.S. users of Linux, an alternative to Microsoft Corp.'s (MSFT) Windows operating system, according to the research firm IDC.
     The companies said they have partnerships with computing vendors including Compaq, Dell, IBM, Intel and Hewlett-Packard to support their adoption of open source solutions.
     Besides software for PCs, open source technology is applicable to software for such devices as handheld computers, personal desk assistants and smart phones.
     Red Hat (RHAT) said it expects the merger to close by Jan. 27. Matthew Szulik, president of Red Hat, will act as the combined companies' president and CEO.
     In early morning trading Monday, Red Hat -- which went public in August -- rose 1-3/4 to 103-9/16. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.