Exhibit 99
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RED HAT, INC. TO ACQUIRE EMBEDDED LINUX DEVELOPER WIRESPEED
Expands Red Hat's Unmatched Custom Development and Consulting Expertise
Research Triangle Park, N.C., June 14, 2000. Red Hat, Inc.
(NASDAQ:RHAT), the leader in open source Internet infrastructure solutions,
announced today that it has signed a definitive agreement to purchase
privately-held WireSpeed Communications Corporation. Under the terms of the
agreement, Red Hat will issue 1,531,232 shares of Red Hat common stock in
exchange for all of the outstanding securities of Huntsville, Alabama-based
WireSpeed. Red Hat may issue additional shares based upon the future performance
of WireSpeed. The transaction will be valued based on an average closing price
of Red Hat's common shares for the five-day period ended June 15, 2000. The
acquisition will be accounted for as a purchase and is expected to be completed
by July 31, 2000, subject to customary closing conditions.
International Data Corp. (IDC) research predicts that by 2002, there
will be more than 55 million handheld and notebook-style information appliance
devices and that by 2005, shipments of these appliances will exceed shipments of
PCs. Connecting these devices to the Internet and private networks will be
essential. WireSpeed is a leading developer of network and telecommunications
components for embedded systems software. WireSpeed's clients include
semiconductor, Internet device and industrial control leaders, including
companies like Hewlett-Packard, Interphase, NETsilicon, STMicroelectronics and
Time Domain Corporation. WireSpeed will become part of Red Hat's Client Services
Group--the industry's largest source of custom Open Source development expertise
in embedded, networked and post-PC devices.
"The addition of WireSpeed's embedded development expertise helps Red
Hat continue to meet the tremendous demand for embedded development," said
Matthew Szulik, president and CEO of Red Hat, Inc. Wirespeed's expertise in
telecommunications and networking for embedded systems also strengthens Red
Hat's position as the technology and market leader for Open Source Internet
Infrastructure solutions ranging from powerful servers to the smallest embedded
devices."
In January, 2000, Red Hat acquired Cygnus Solutions, Inc., a top
provider of Open Source software, development tools, engineering services and
developer support for a variety of desktops, client/server systems, real-time
operating systems (RTOS) and embedded, post-PC platforms. Red Hat's Client
Services Group provides custom engineering services to top companies worldwide,
helping them quickly create and deploy next-generation Internet infrastructure
solutions, including appliances, handhelds and other post-PC and deeply embedded
devices. With the addition of Cygnus and WireSpeed, Red Hat's Client Services
Group now delivers more than 100 next-generation software developers.
"Red Hat has a tremendous vision, expertise and market lead in creating
a whole new generation of powerful, reliable devices running Open Source
solutions," said Andrew Bailey, President of WireSpeed. "The combination of
WireSpeed and Red Hat will help companies bring a new paradigm of post-PC, Open
Source computing to market more quickly."
Open Source Momentum
International Data Corp. (IDC) research states that paid Linux
shipments grew faster than any other server operating system over the past two
years, and their preliminary figures for 1999 show Linux shipments hold 24.6
percent of the server operating system market, up from 15.8 in 1998. IDC also
states that Red Hat Linux is by far the most popular distribution, preferred by
68.7 percent of U.S. Linux users. Research firm Netcraft, Inc.
(www.netcraft.com), states that as of May 2000, 36 percent of all public Web
sites run on Linux-based operating systems, making Linux the most popular choice
for deploying public Web sites. Red Hat's numerous alliances with industry
leaders and the demand for Linux-based applications has created open source
support from many of the industry's leading software and hardware manufacturers,
including Compaq, Computer Associates, Dell, Hewlett-Packard, IBM, Intel,
Netscape, Novell, Oracle and SAP.
<PAGE>
About WireSpeed
WireSpeed is a leading developer of communications software for
embedded systems. Harnessing the power of Linux, WireSpeed's customized
solutions act as a catalyst for expediting the growth and innovation of
next-generation Linux-based networked products. WireSpeed's expertise
complements existing in-house resources and allows companies to focus on core
competencies, accelerating time-to-market and reducing development costs.
WireSpeed ports Linux to various architectures (traditional microprocessor and
DSP) and crafts network drivers to get customer devices connected to ATM, xDSL,
Ethernet, or analog networks. WireSpeed provides solutions for many industry
leaders in the semiconductor, Internet device and industrial control markets.
About Red Hat, Inc.
Founded in 1994, Red Hat (Nasdaq:RHAT) is the leading provider of open
source Internet infrastructure solutions, ranging from small embedded devices to
high availability clusters and Web serving. Red Hat applies its technological
leadership to create open source solutions for Internet infrastructure and
post-PC environments, offers services backed by the best understanding of open
source and the most comprehensive resources, delivers the brand of a widely
trusted open source leader and corporate partner, and persists in an indelible
commitment to the virtues of open source to lead a revolution in the computing
industry.
Red Hat is based in Research Triangle Park, N.C. and has offices
worldwide. Visit Red Hat on the Web at www.redhat.com. For investor inquiries,
contact Lippert/Heilshorn at (212) 838-3777.
Forward-Looking Statements
Forward-looking statements in this press release are made pursuant to
the safe harbor provisions of Section 21E of the Securities Exchange Act of
1934. Investors are cautioned that statements in this press release that are not
strictly historical statements, including, without limitation, management's
plans and objectives for future operations and management's assessment of market
factors, constitute forward-looking statements which involve risks and
uncertainties. These risks and uncertainties include, without limitation,
product plans and performance, the ability to continue to develop the Linux
kernel and other software, reliance upon strategic relationships, Red Hat's
dependence upon an open source business model, reliance upon independent
third-party Linux developers, management of growth, expansion of Red Hat's
business focus and operations, the possibility of undetected software errors,
the enforceability of the GNU General Public License and other licenses under
which Red Hat's products are developed and licensed, the scarcity of Linux-based
applications, the risks of economic downturns generally, and in Red Hat's
industry specifically, the risks associated with competition and competitive
pricing pressures, the viability of the Internet, and other risks detailed in
Red Hat's filings with the Securities and Exchange Commission, copies of which
may be accessed through the SEC's Web site at http://www.sec.gov.
LINUX is a trademark of Linus Torvalds. RED HAT is a registered
trademark of Red Hat, Inc. All other names and trademarks are the
property of their respective owners.
CONTACTS:
Media: Investors:
Melissa London, 919/547-0012 Hal Covert, 919/547-0012
Red Hat, Inc. Chief Financial Officer
[email protected] Red Hat, [email protected]
Peter Gorman or Bryan Scanlon Lippert/Heilshorn & Associates
Schwartz Communications for Red Hat John Heilshorn or Jody Burfening
781/684-0770 212/838-3777
[email protected] [email protected]
[email protected]
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