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RedHat acquires JBoss for $350 million

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RedHat acquires JBoss for $350 million

Raleigh (NC) – Linux distributor Red Hat today announced that it will acquire JBoss in a $350 million deal. The investment will provide the company access to JBoss’ middleware for e-business applications, such as application and web servers as well as transaction and messaging tools.

JBoss, headquartered in Atlanta, Georgia, has been one of the pioneering companies that pursued a professional open source model with applications that are targeting especially medium-sized and large enterprises.

The firm’s software is built around Sun’s Java EE and currently is focused on “JEMS” (JBoss Middleware Enterprise Middleware Suite), which includes application servers, databases, portal software, process management, transaction and management applications as well as developer tools. “By acquiring JBoss, [we] expect to accelerate the shift to service-oriented architectures, by enabling the next generation of web-enabled applications running on a low-cost, open source platform,” Red Hat said in a prepared statement.

JBoss has been at the center of acquisition rumors for several months. Besides Red Hat, Oracle was reported to have voiced interest in adding the firm’s offering to its portfolio. Red Hat will pay $350 million JBoss initially and add another $70 million if certain future goals are achieved.

Red Hat said that the acquisition “will be slightly dilutive” to its quarter ending on 31 August 2006, “but neutral to earnings and cash flow for the full fiscal year.” Positive effects of the acquisition are expected to be recognized in the fiscal year ending on 28 February 2008.