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Filed by VA Linux Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: VA Linux Systems, Inc.
Commission File No.: 000-28369
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.
"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."
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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
detailed in an S-4 registration statement to be filed with the Securities and
Exchange Commission (SEC). 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.
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]
