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By Joey Gardiner, 2 August 2000 13:49

NEWS Linux vendor Caldera Systems has acquired a large part of venerable Unix player SCO, in a deal thought to be worth up to $145m. The upstart open source player is buying SCO's server software division and professional services division. This gives Caldera access rights to the Unix Kernel, and rights to SCO's work on the high-end project 'Monterey' joint venture with IBM. It also gives Caldera access to SCO's channel and partner infrastructure, greatly expanding Caldera's distribution network. SCO will retain its Tarantella middleware software, plus ownership of the OpenServer OS revenue stream and technology. Caldera, however, will be the exclusive distributor of OpenServer range of products. Ed Donakey, director of mergers and acquisitioins for Caldera, said: "We want to be able to go forward with a strong joint Linux and Unix offering, and give SCO the ability to move forward with a pure play Tarantella business model." He added: "Industry is no longer worried about Linux's status as a product, but, it is worried about the channel to market. Our acquisition today gives us this channel." Caldera is paying for the deal with 17.54 million shares, $7m in cash and a loan of $18m to SCO from Caldera investor Canopy. Tony Lock, senior analyst for Bloor Research, said Caldera had made the purchase to exploit SCO's distribution channels. "Caldera will also be able to exploit SCO's current customers, and use the credibility they have as a well respected Unix vendor." Clive Longbottom, analyst for Strategy Partners, said the deal represented the end for SCO. He added: "Caldera have removed a fly in their ointment by buying a rival OS vendor, and will use the Monterey technology to gain influence with IBM." Shares in Caldera fell six per cent on early morning trading, bringing their market value to $271m. Shares in SCO rose 12.6 per cent. For related news
'Linux gains momentum as application server platform' http://www.silicon.com/a38762
'The Agenda Setters: Ransom Love, president & CEO, Caldera Systems' http://www.silicon.com/a37085
'Caldera hits high on Nasdaq' http://www.silicon.com/a36513