Red Hat global preferences

Press release

Red Hat Completes Acquisition of Embedded Systems Developer WireSpeed

Red Hat Adds WireSpeed's Expertise in Telecommunications and Networking to Embedded Systems Business

RALEIGH, N.C

Red Hat, Inc. (NASDAQ:RHAT), the leader in open source Internet infrastructure solutions, completed the acquisition of privately-held WireSpeed Communications Corporation Inc., a leading developer of network and telecommunications components for embedded systems software. The transaction was valued at $30.5 million based on an average closing price of Red Hat's common shares for a five-day period ended June 15, 2000. Under the terms of the transaction, Red Hat issued 1,525,365 shares of Red Hat common stock in exchange for all of the outstanding securities of Huntsville, Alabama-based WireSpeed. The acquisition has been accounted for as a purchase.

WireSpeed will scale Red Hat's embedded systems business, which is enabling top companies worldwide to quickly create and deploy next-generation Internet infrastructure solutions, including appliances, handhelds and other post-PC and deeply embedded devices. 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.

Matthew Szulik, president and chief executive officer, said, "The addition of WireSpeed extends our strategy of providing expertise in embedded, networked and handheld devices that connect to one other over the Internet. In working closely with companies such as Hitachi and Fujitsu to develop next-generation computing devices, we are finding that there is a rapidly increasing demand for embedded systems software, particularly in telecommunications and networking."

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, including companies like Hewlett-Packard, Interphase, NETsilicon, STMicroelectronics and Time Domain Corporation.

About Red Hat, Inc.

Red Hat, the world's leading open source and Linux provider, is headquartered in Raleigh, NC with satellite offices spanning the globe. Red Hat is leading Linux and open source solutions into the mainstream by making high quality, low cost technology accessible. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training and consulting services to its customers worldwide and through top-tier partnerships. Red Hat's open source strategy offers customers a long term plan for building infrastructures that are based on and leverage open source technologies with focus on security and ease of management. Learn more: http://www.redhat.com

There is no default locale or translation available for this content.

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, reliance upon strategic relationships, management of growth, the possibility of undetected software errors, 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.

About Red Hat

Red Hat is the world’s leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, and open source communities, Red Hat helps create relevant, innovative technologies that liberate resources for growth and prepare customers for the future of IT. Learn more at http://www.redhat.com.

Forward-looking statements

Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: risks related to delays or reductions in information technology spending; the effects of industry consolidation; the ability of the Company to compete effectively; the integration of acquisitions and the ability to market successfully acquired technologies and products; uncertainty and adverse results in litigation and related settlements; the inability to adequately protect Company intellectual property and the potential for infringement or breach of license claims of or relating to third party intellectual property; the ability to deliver and stimulate demand for new products and technological innovations on a timely basis; risks related to data and information security vulnerabilities; ineffective management of, and control over, the Company’s growth and international operations; fluctuations in exchange rates; and changes in and a dependence on key personnel, as well as other factors contained in our most recent Quarterly Report on Form 10-Q (copies of which may be accessed through the Securities and Exchange Commission’s website at http://www.sec.gov), including those found therein under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations". In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic and political conditions, governmental and public policy changes and the impact of natural disasters such as earthquakes and floods. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.