VA Linux Acquires Server and Storage Vendors

SAN MATEO (03/15/2000) - Attempting to establish itself as a player to be reckoned with in the increasingly critical Internet infrastructure market, VA Linux Systems Inc. today acquired both TruSolutions, builder of rack-mount servers, and NetAttach, which makes high availability storage devices.

With the TruSolutions deal, VA Linux now has hold of the design expertise and product line breadth that includes an entry-level 1U server to complement its brand new high-performance 1U server announced by VA Linux earlier today. [See "VA Linux Systems Delivers Thin Rack-mount Servers," March. 15.]"We believe these acquisitions will reinforce our position in the Linux market by broadening our current product offerings and giving us access to tremendous engineering talent for future-generation products," said Dr. Larry M. Augustin, president and CEO of VA Linux Systems.

VA Linux will acquire TruSolutions through a combination of cash and stock that together is worth US$200 million. All outstanding stock of TruSolutions will be exchanged for approximately 1.8 million newly issued shares of VA Linux based on Tuesday's closing price for VA Linux Systems stock, company officials said.

Also, shareholders of TruSolutions will receive $10 million in cash.

With the NetAttach agreement, VA Linux would appear to immediately improve its ability to deliver products in the Network-Attached Storage (NAS) arena, along with complementary technical expertise in offering a number of storage solutions on Linux. The NAS market, according to the latest figures from IDC, was worth $850 million in 1999, but with an expected 66 percent growth rate over the next five years.

VA Linux Systems officials said they expect to begin shipping NAS storage products during the fourth fiscal quarter of this year.

Under the terms of the NetAttach deal, $10 million in cash and approximately 286,000 newly issued shares of VA Linux Systems, based on Tuesday's closing price for VA Linux Systems stock, will be exchanged for all outstanding stock of NetAttach.

More information about Sunnyvale, California-based VA Linux's deals with TruSolutions and NetAttach can be found at the company's Web site at

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