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Red Hat Grabs Web Server Developer

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Open source leader Red Hat today announced it will acquire privately-held C2Net Software
for about $42 million in stock.

Red Hat will issue 1,992,883 shares of common stock in exchange for all of
the outstanding securities of Oakland, Calif.-based C2Net. The
transaction will be valued based on an average closing price of Red Hat’s
common shares for the seven-day period ended Aug. 16.
Open source leader Red Hat today announced it will acquire privately-held C2Net Software for about $42 million in stock.

Red Hat (NASDAQ:RHAT) said C2Net was chosen because of its Apache-based Stronghold Web server. Commanding more than 30 percent of the Web server market, according to
Security Space, C2Net’s Stronghold server was a preferred choice for Red Hat
to bolster its line of secure product offerings.

“Powerful, secure solutions like C2Net’s Stronghold and the rapid technological advancement of the open source development model, which finds and fixes holes faster than proprietary development, delivers organizations a safe, advanced foundation for e-business initiatives,” said Matthew Szulik, president and chief executive officer of Red Hat.

Red Hat Linux itself is the most popular open source operating system for Web servers and sites. More than 72 percent of all Web sites running Linux choosing Red Hat according to the latest Netcraft survey.

International Data Corp. reports that paid Linux shipments grew faster than
any other server operating system over the past two years. Its
preliminary figures for 1999 show Linux shipments hold 24.6 percent of the
server operating system market, up from 15.8 percent in 1998.

C2Net’s clientele includes such companies as, AmeriTrade Holdings
, and IBM.

C2Net is the fifth major acquisition of Red Hat’s modest shopping spree this
year. In July, it completed the acquisition of WireSpeed, a leading developer of
network and telecommunications software that helps connect post-PC and
embedded devices to the Internet and secure Web servers like Stronghold.

In May, Red Hat acquired Bluecurve,
whose performance management solutions allow organizations to simulate and
measure user activity and demands placed on the Internet infrastructure and

In January, Red Hat snagged payment processing provider Hell’s Kitchen
Systems and platform specialist Cygnus

Red Hat’s acquisition of C2Net is expected to be completed by Aug. 31.

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