Linux love: VA Linux buys Andover.net

Andover.net's 25-day IPO quiet period was barely over before the company was acquired. VA Linux said Thursday that it will purchase Andover.net in a stock and cash deal
Written by Larry Dignan, Contributor on

Here's how officials detailed the deal on a conference call: Based on VA Linux's closing price of 137 Wednesday, Andover.net shareholders would get $3.81 (£2.36) in cash and .397 shares of VA Linux. The deal values Andover.net just above $54 a share. Andover.net shareholders will own 13 percent of VA Linux. Andover.net closed at 36 Wednesday. The final price will be determined when the deal closes.

Andover.net, which went public Dec. 8 just a day before VA Linux's record IPO, peaked at 90.

With the LinuxWorld trade show (see special report) serving as the backdrop, VA Linux said the deal could "revolutionise the Linux market space," but is really about VA Linux building community and services.

On a conference call, CEO Larry Augustin said the deal creates "the Yahoo! for open source developers" with 70 million page views a month and additional revenue streams.

In a recent interview with ZDII, Augustin said VA Linux was providing the Linux community with new tools such as Source Forge, a database of open source tools. VA Linux already owns the Linux.com domain.

Augustin also said VA Linux, which primarily relies on hardware for its revenue, plans to expand its services portfolio to boost profit margins.

"This acquisition moves VA Linux forward on the path to being the biggest name in Linux and Open Source," said Augustin, in a statement.

The transaction should be completed in VA Linux's third quarter.

Among the benefits highlighted by VA Linux, the company said it will accelerate services offering and consolidate its Web offerings into one portal. Andover.net and VA Linux operate the Linux.com, Sourceforge.net, and Themes.org, Slashdot.org and Freshmeat.net sites and account for almost two-thirds of Linux traffic.

Officials said the Andover.net acquisition would be accretive to earnings and revenue.

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