Red Hat buys JBoss for 350M


Raleigh, N.C.,-based open source solution provider Red Hat announced today that it will buy open source middleware provider JBoss for at least $350 million.

Red Hat agreed to buy JBoss for about $350 million in an initial purchase, with an additional $70 million dependant on future performance, according to a company statement. The purchase, expected to be completed near the end of May, is comprised by 40 percent cash and 60 percent Red Hat stock.

Red Hat said Monday that the merger could help speed a corporate shift to service-oriented architectures.

"It is at Red Hat's very core to help unlock the power of open source and open communities to innovate across industries, geographies and economies," said Matthew Szulik, Red Hat chairman and chief executive officer. "Red Hat and JBoss are fully aligned around the belief that the open source development model continues to change the economies of enterprise IT in favor of the consumer, and we truly believe in the potential of software innovation, once freed from the fetters of proprietary development."

Marc Fleury, JBoss CEO, said his customers increasingly use open source technology and are looking for a globally recognized vendor for support.

"The union of these two companies will demonstrate the benefits of a pure open source play," Fleury said. "Our customers are increasingly standardizing their infrastructures on open source technologies and want a stable and trusted global open source vendor to support them."

A frequently asked questions response on JBoss's website said that the company had been growing swiftly on its own, but chose to merge with Red Hat to become part of a more powerful open source provider.

"Although JBoss was experiencing tremendous growth as an independent company, there was an even greater opportunity to join forces with a larger and more established open source provider that could further expedite the growth of the channel, expand the services offering and coverage and expedite acceptance of JBoss technology as an enterprise standard," the statement said.

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