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Filed By VA Linux Systems, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Exchange Act of 1934
Subject Company: Andover.Net, Inc.
Commission File No. 001-15499
FOR IMMEDIATE RELEASE - FEBRUARY 3, 2000 - 5:30 AM ET
VA LINUX TO ACQUIRE ANDOVER.NET IN
MOST SIGNIFICANT TRANSACTION IN LINUX HISTORY
Combined Network Creates the Leading Internet Destination
in the Linux and Open Source Community
NEW YORK, NY -FEBRUARY 3, 2000 -VA Linux Systems (NASDAQ: LNUX), a leading Linux
and Open Source solutions company, today announced the acquisition of
Andover.Net (NASDAQ: ANDN), the leading Linux destination on the Internet, in a
transaction that could revolutionize the Linux market space. VA Linux will own
and operate the most popular Open Source developer network. This reinforces VA
Linux's position as the only public company in the United States to offer
exclusively Open Source systems, software, service and Web-based developer
solutions.
Under the terms of the merger agreement, which was approved by the Boards of
Directors of each company, each share of Andover.Net Common Stock will be
exchanged for 0.425 of a share of VA Linux Systems Common Stock, reduced by an
aggregate of $60 million in cash payments to Common Stock holders of
Andover.Net. The transaction is expected to be completed during VA Linux
Systems' third fiscal quarter and will be accounted for as a purchase. Based
upon analyst's estimates, the Company expects the transaction to be accretive to
revenue and gross margin this year.
Key benefits of the acquisition will be to:
Accelerate the long-term model of VA Linux's web and service businesses,
reinforcing VA's position as a leading Linux and Open Source solutions company;
Consolidate the complementary networks of VA (including Linux.com,
Sourceforge.net, and Themes.org) and Andover.Net (including Slashdot.org and
Freshmeat.net) to create the Internet's leading destination for Open Source
developers, with nearly two-thirds of the total traffic of major Open Source
sites and putting the combined network in the top 100 web destinations
worldwide;
Coordinate the activities of the leading web sites for Open Source development
projects;
Increase the opportunity for sponsorships and business partnership revenues
across the Company's network;
Expand the range of VA Linux's products and services, such as the announcement
last week of consulting to Hewlett Packard's Printer Division in their Open
Source software plans;
Combine the companies' teams, building next-generation services and e-commerce
infrastructure for faster time-to-market; and
Integrate teams that have worked cooperatively within the Linux community
culture over several years, initially as volunteers in the Open Source world,
and recently in the building of the next generation of developer infrastructure.
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"This acquisition moves VA Linux forward on the path to being the biggest name
in Linux and Open Source," said Dr. Larry M. Augustin, founder, president and
CEO of VA Linux Systems. "With our purchase of Andover.Net, we can offer the
developer community better infrastructure for Open Source development, and
expand the range and effectiveness of solutions available to our customers."
"Andover.Net and VA are a perfect match," said Bruce Twickler, CEO of
Andover.Net. "We both believe in the future of Open Source. We both believe that
live software communities on the Net are more important than packages that ship
once every three years and companies that simply intermediate between developers
and users."
The transaction is subject to approval by the stockholders of Andover.Net and
customary closing conditions. Officers, directors and certain affiliates of
Andover.Net have executed voting agreements in support of the transaction.
About VA Linux Systems
VA Linux Systems is a leading Linux and Open Source company, offering a single
point of contact for Linux systems, Open Source software, professional services
and technical support. VA Linux owns and operates many popular Open Source web
sites, including Linux.com, Themes.org and SourceForge, a leading Open Source
development site. Headquartered in Sunnyvale, Calif., VA Linux is located on the
Web at http://www.valinux.com/
About Andover.Net
Andover.Net (NASDAQ:ANDN - news) is the leading Linux destination on the
Internet. Serving 50 million page impressions to over 2.4 million users each
month, Andover.Net (www.Andover.Net) includes the largest news/community site,
Slashdot (slashdot.org); the largest site for programmer resources,
Freshmeat.net (www.freshmeat.net); and the popular developer e-commerce site,
ThinkGeek (thinkgeek.com). With these sites and our other Linux sites such as
FreeCode (freecode.com) and LinuxDaveCentral (www.linux.davecentral.com),
Andover.Net accounts for over 50% of the visits to Linux destinations on the
Internet. Andover.Net also includes cross-platform sites that provide programmer
and developer resources for users of many popular operating systems in addition
to Linux such as Windows, UNIX and Macintosh.
With the exception of the historical data contained herein, this press release
is comprised of statements relating to future results of the company (including
certain projections and business trends) that are "forward-looking statements"
as defined in the Private Securities Litigation Reform Act of 1955. Actual
results may differ materially from those projected as a result of certain risks
and uncertainties. These risks and uncertainties include, but are not limited
to: VA Linux's ability to integrate Andover.Net into its operations; the timing
of new product introductions; pricing pressures and other competitive factors;
and the fact that VA Linux and Andover.Net have incurred and will continue to
incur substantial losses. Further information regarding these risks will be
included in a registration statement on Form S-4 to be filed by VA Linux with
the Securities and Exchange Commission (SEC) in connection with the merger. In
addition, each of VA Linux and Andover.Net may achieve results that differ
materially from those projected herein. Further information on the risks and
uncertainties affecting each company is contained in each company's filings with
the SEC, including their respective S-1 registration statements. The above
mentioned documents contain important information and you are urged to review
them carefully. Each such document is available free of charge at the SEC
Website at www.sec.gov or from the contacts listed below.
VA Linux Systems, Inc., its officers and directors may be deemed to be
participants in the solicitation of proxies from Andover.Net shareholders with
respect to the transactions contemplated by the merger agreement. Information
regarding such officers and directors is included in VA Linux's S-1 Registration
Statement filed with the SEC on December 9, 1999. This document is available
free of charge at the SEC Website at www.sec.gov and from the VA Linux contact
listed below.
Andover.Net, Inc., its officers and directors may be deemed to be participants
in the solicitation of proxies from Andover.Net shareholders with respect to the
transactions contemplated by the merger agreement. Information regarding such
officers and directors is included in Andover.Net's S-1 Registration Statement
filed with the SEC on December 3, 1999. This document is available free of
charge at the SEC Website at www.sec.gov and from the
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Andover.Net contact listed below. In addition, fifty percent of the unvested
options held by employee officers and directors of Andover.Net will vest as a
result of this transaction. It is also anticipated that Andover.Net's officers
and employee directors will enter into employment/non-competition agreements
with VA Linux. These agreements have been neither negotiated nor executed as of
the date of this filing.
SHAREHOLDERS OF ANDOVER.NET AND OTHER INVESTORS ARE URGED TO READ THE PROXY
STATEMENT-PROSPECTUS WHICH WILL BE INCLUDED IN THE REGISTRATION STATEMENT ON
FORM S-4 TO BE FILED BY VA LINUX SYSTEMS, INC. IN CONNECTION WITH THE MERGER
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. AFTER SUCH DOCUMENT IS FILED, IT
WILL BE AVAILABLE FREE OF CHARGE ON THE SEC WEBSITE AT WWW.SEC.GOV AND FROM VA
LINUX AND ANDOVER.NET THROUGH THE CONTACTS LISTED BELOW.
Investor Inquiries:
VA Linux Systems
Joyce Chowla, 408/542-5718
[email protected]
Andover.Net
Janet Holian, 978/635-5300
[email protected]
or
Media Inquiries:
Eureka Endo
VA Linux Systems, 408/542-5754
[email protected]
Access Communications
Wendi Taylor, 415/904-7070
[email protected]
Schwartz Communications, Inc.
Chris Stamm/Leah Barrett, 781/684-0770
[email protected]
