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Filed by: The Santa Cruz Operation, Inc.
Pursuant to Rule 425 Under the Securities Act of
1933 And Deemed Filed Pursuant to Rule
14a-12 Under the Securities Exchange Act of 1934
Subject Company: The Santa Cruz Operation,
Inc. (Commission File No. 000-21484)
FOR IMMEDIATE RELEASE
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CALDERA SYSTEMS TO ACQUIRE SCO SERVER SOFTWARE AND PROFESSIONAL SERVICES
DIVISIONS, PROVIDING WORLD'S LARGEST
LINUX /UNIX CHANNEL
Offers First Open Internet Platform, Embracing Open Access
to Linux and UNIX Technologies
OREM, UT--August 2, 2000--Caldera Systems, Inc., (Nasdaq: CALD), a "Linux
for Business" leader and The Santa Cruz Operation, Inc., (SCO) (Nasdaq: SCOC),
the world's leading provider of UNIX operating systems, today announced that
Caldera Systems has entered into an agreement to acquire the SCO Server Software
Division and the Professional Services Division. The Professional Services
Division will operate as a separate business unit of Caldera, to provide
services to meet the Internet and eBusiness infrastructure needs of customers.
The new company will offer the industry's first comprehensive Open Internet
Platform (OIP) combining Linux and UNIX server solutions and services globally.
The OIP provides commercial customers and developers with a single platform that
can scale from the thinnest of clients to the clustering needs of the largest
data center.
The Open Internet Platform combines the robust scalability of the UNIX
system with the low-cost, developer-accepted Linux operating system. The
products, solutions, and services developed for the Open Internet Platform will
be available through more than 15,000 partners worldwide.
Details of the Agreement
Caldera Systems, Inc. will form a new holding company, Caldera, Inc., to
acquire assets from the SCO Server Software Division plus the SCO Professional
Services
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Division, including a highly skilled workforce, products and channel resources.
Caldera, Inc. will have exclusive distribution rights for the SCO OpenServer
product line, and is fully committed to servicing and supporting the SCO
OpenServer customer base.
SCO will receive 28% of Caldera, Inc., which is estimated to be an aggregate
of approximately 17.54 million shares of Caldera stock (including approximately
2 million shares reserved for employee options assumed by Caldera for options
currently held by SCO employees joining Caldera), and $7 million in cash. In
conjunction with the acquisition, The Canopy Group, Inc., a major stockholder of
Caldera Systems, Inc., has agreed to loan $18 million to SCO. SCO will retain
its Tarantella Division, and the SCO OpenServer revenue stream and intellectual
properties. Revenues for SCO OpenServer were $11.1 million in Q3 of FY2000. Net
proceeds to SCO after expenses will be approximately 55% of future SCO
OpenServer revenues.
Caldera, Inc. will be headquartered in Orem, Utah, with locations worldwide.
The boards of directors of both companies have unanimously approved the
acquisition which is subject to the approval of Caldera Systems, Inc. and The
Santa Cruz Operation, Inc. stockholders, and regulatory agencies, as well as
meeting certain other closing conditions. The companies anticipate closing the
transaction during October, 2000.
Following the completion of the acquisition, Ransom Love, current president
and CEO of Caldera Systems, Inc. will become CEO of Caldera, Inc., and David
McCrabb, current president of the SCO Server Software Division, will become
president and COO of Caldera, Inc. Jim Wilt, current president of the SCO
Professional Services Division will become president of the newly formed Caldera
Services Division. Doug Michels, president and CEO of The Santa Cruz Operation,
Inc., will join the Caldera, Inc. board of directors. SCO will also appoint a
second representative to the board of Caldera, Inc.
Industry Impact
"This acquisition is an industry-changing event that puts Caldera front and
center as the answer to the enterprise question," said Ransom Love, President
and CEO of Caldera Systems, Inc. "Caldera will further broaden and validate both
the Linux and UNIX industry and community, by providing open access to its
unified Linux and UNIX technologies, and by offering support, training and
professional services to customers
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worldwide. Caldera is fully committed to supporting and servicing the SCO
OpenServer and UnixWare communities."
Together, technologies from Caldera Systems and the SCO Server Software and
Professional Services Divisions will provide enterprise-class solutions with
worldwide support and distribution infrastructure.
"The new company will be a very strong entity that we believe will compete
successfully on a worldwide basis, "said David McCrabb, president of the SCO
Server Software Division. "Caldera, Inc. will incorporate a worldwide network
of sales and support offices, a strong commercial UNIX system business, and a
rapidly growing open source company. This combination will be a force to contend
with in the worldwide market for Internet solutions on high volume platforms."
"Businesses implementing eBusiness or other Internet based customer
interaction systems will benefit greatly from the Open Internet Platform," said
Jim Wilt, president of the SCO Professional Services Division. "Linux and UNIX
technologies are cornerstones providing solutions to problems that businesses
face every day."
"This transaction enables us to invest in the exciting growth opportunities
we see for Tarantella," said Doug Michels, CEO of The Santa Cruz Operation, Inc.
"This growth is fueled by increasing business use of the Internet, by the
continued attractiveness of thin-client computing, and by the accelerating
adoption of the Application Service Provider (ASP) business model. This
acquisition lets us create organizations with more of a `pure play' in these
markets."
Forum 2000
Caldera Systems will join SCO in hosting Forum2000, to be held August 20-
23, at the University of California, Santa Cruz. At the event, Caldera plans to
unveil their updated product offering. For more information visit
www.sco.com/forum2000.
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Caldera and Open Source
Caldera Systems is a leader in and supporter of the Open Source movement.
Please visit www.openlinux.org to download Caldera Systems' technologies that
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have been open-sourced--including but not limited to--LIZARD, Caldera Open
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Administration System (COAS), Webmin, OpenSLP, the NetWare Kernel File System
(NKFS) and the OpenLinux 2.2 port for Sun's SPARC(TM) and UltraSPARC(TM)-based
platforms.
Caldera Systems, Inc.
Caldera Systems, Inc. (Nasdaq: CALD) is a "Linux for eBusiness" technology
leader in developing and marketing successful Linux-based business solutions,
including its award-winning OpenLinux, NetWare for Linux, Linux technical
training, certification and support--with free 30-day phone support and on-site
consulting. Caldera OpenLearning Providers offer exceptional distribution-
neutral Linux training and certification based on Linux Professional Institute
(LPI/TM/) certification standards. Caldera Systems supports the open source
community and is a leader in, and advocate of Linux Standard Base (LSB/TM/) and
LPI/TM/.
Caldera, Inc. was co-founded in 1994 by Ransom Love. Caldera Systems, Inc. was
founded by Ransom Love in 1998 to develop Linux-based business solutions. Based
in Orem, UT, Caldera Systems has offices and 800+ resellers worldwide. For more
information, see www.calderasystems.com or in the US call 888-GO-Linux (888-465-
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4689).
About SCO
SCO is a global leader in server-based software for networked business
computing. SCO is the world's number one provider of UNIX server operating
systems, and the leading provider of network computing software that enables
clients of all kinds--including, PCs, graphical terminals, NCs, and other
devices - to have webtop access to business-critical applications running on
servers of all kinds.
SCO designed Tarantella web-enabling software, the world's first web-enabling
software for network computing. SCO sells and supports its products through a
worldwide network of distributors, resellers, systems integrators, and OEMs. For
more information, see SCO's home page at: www.sco.com
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Caldera is a registered trademark of Caldera Systems, Inc. All other products,
services, companies, events and publications are trademarks, registered
trademarks or servicemarks of their respective owners in the U.S. and/or other
countries.
SCO, The Santa Cruz Operation, the SCO logo, the Tarantella logo, Tarantella,
UnixWare, and SCO OpenServer are trademarks or registered trademarks of The
Santa Cruz Operation, Inc. in the USA and other countries. UNIX is a registered
trademark of The Open Group in the US and other countries. All other brand or
product names are or may be trademarks of, and are used to identify products or
services of, their respective owners.
LINUX is a registered trademark of Linus Torvalds.
Press Note:
Mr. Love and Mr. Michels will discuss the acquisition with the media on a
conference call beginning at 1:30 p.m. EST. To participate in the call, please
contact the press references listed below.
Forward Looking Statements
Cautionary Note Regarding Forward-Looking Statements under the Private
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Securities Litigation Reform Act of 1995: Information in this release that
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involves Caldera's, SCO's and, assuming the acquisition of the SCO Server
Software and Professional Services Divisions (the Acquisition) is completed, the
combined companies' expectations, beliefs, hopes, plans, intentions or
strategies regarding the future are forward-looking statements that involve
risks and uncertainties. These statements include statements about Caldera's,
SCO's and the combined companies' strategies in the marketplace, their market
positions and their relationships with customers.
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All forward-looking statements included in this release are based upon
information available to Caldera and SCO as of the date of the release, and
neither Caldera, SCO nor the combined companies assume any obligation to update
any such forward-looking statement. These statements are not guarantees of
future performance and actual results could differ materially from current
expectations. Factors that could cause or contribute to such differences
include, but are not limited to 1) the potential disruption of Caldera's and
SCO's businesses that might result from employee or customer uncertainty, and
lack of focus following announcement of the Acquisition in connection with
integrating the operations of Caldera and SCO; 2) product integration risk due
to overlapping products and technologies; 3) the possibility that the
transactions described herein might not be consummated; 4) the effects of the
public announcement of the Acquisition on Caldera's and SCO's stock prices,
their sales and operating results, their ability to attract and retain key
personnel and the progress of certain of their development projects; 5) the risk
that the announcement of the Acquisition could result in decisions by customers
to defer purchases of products of Caldera or SCO; 6) the substantial charges to
be incurred due to the Acquisition, primarily in the first and second quarters
of the year; 7) the risk that redundancy in staffing and infrastructure could
reduce efficiency and increase costs; 8) the difficulties of managing
geographically dispersed operations; and 9) the risk that other benefits sought
to be achieved by the Acquisition will not be achieved. These and other factors
are risks associated with Caldera's and SCO's businesses that may affect their
operating results and are discussed in SCO's Annual Report on Form 10-K for the
fiscal year ended September 30, 1999 filed with the Securities and Exchange
Commission ("SEC") on December 28, 1999 and Caldera's and SCO's quarterly
reports on Form 10-Q filed with the SEC.
Additional Information and Where to Find It: It is expected that Caldera will
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file a Registration Statement on SEC Form S-4 and Caldera and SCO will file a
Joint Proxy Statement/Prospectus with the SEC in connection with the
Acquisition, and that Caldera and SCO will mail a Joint Proxy
Statement/Prospectus to stockholders of Caldera and SCO containing information
about the Acquisition. Investors and security holders are urged to read the
Registration Statement and the Joint Proxy Statement/Prospectus carefully when
they are available. The Registration Statement and the Joint Proxy
Statement/Prospectus will contain important information about Caldera, SCO, the
Acquisition, the persons soliciting proxies relating to the Acquisition, their
interests in the Acquisition, and related matters. Investors and security
holders will be able to obtain free copies of these documents through the
website maintained by the SEC at http://www.sec.gov. Free copies of the Joint
Proxy Statement/Prospectus and these other documents may also be obtained from
Caldera by directing a request through the Investors Relations portion of
Caldera's Web site at http://www.caldera.com or by mail to Caldera Systems,
Inc., 240 West Center Street, Orem, Utah 84057, attention: Investor Relations,
telephone (801) 765-4999; or from SCO by directing a request through the
Investors Relations portion of SCO's Web sit at http://www.sco.com or by mail to
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The Santa Cruz Operation, Inc., 425 Encinal Street, Santa Cruz, California
95061, attention: Investor Relations, telephone (831) 427-7399.
In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, Caldera and SCO file annual, quarterly and special
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information filed by Caldera or SCO at the
SEC public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or
at any of the SEC's other public reference rooms in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms.
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Caldera's and SCO's filings with the SEC are also available to the public from
commercial document-retrieval services and at the Web site maintained by the SEC
at http://www.sec.gov.
Participants in Solicitation: Caldera, its directors, executive officers and
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certain other members of management and employees may be soliciting proxies from
Caldera stockholders in favor of the issuance of common stock in the
Acquisition. Information concerning the participants in the solicitation is set
forth in a Current Report on Form 8-K filed by Caldera on August 2, 2000.
Press ONLY Contacts:
Nancy Pomeroy
Caldera Systems, Inc.
Phone: (801) 765-4999 ext. 304
Fax: (801) 765-1313
Email: [email protected]
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Jan Tarzia
The Santa Cruz Operation, Inc.
Phone: (831)427-7221
Fax: (831) 427-5418
Email: [email protected]
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