VA Linux Flexes Muscle With Two Acquisitions

Attempting to establish itself as a serious player in the increasingly critical Internet infrastructure market, VA Linux Systems has acquired TruSolutions, a rackmount server builder, and NetAttach, which makes high-availability storage devices.

With the TruSolutions deal, VA Linux now has hold of design expertise and a product-line breadth that includes an entry-level 1U server to complement the high-performance 1U server, also announced last week by the company.

That server, the Model 1000, is based on a design licensed from Net Engines, and holds up to two Pentium III chips in a 1.75-inch-thick design. The Model 1000 is priced starting at $3,000.

The confidence of some corporate users considering a variety of Linux implementations was bolstered by the news.

"These [deals] make them an even more solid partner with which to do business on enterprise-type projects," said John Robinson, a network administrator at an insurance company.

VA Linux will acquire TruSolutions through a combination of cash and stock worth $200 million. All outstanding TruSolutions stock will be exchanged for approximately 1.8 million newly issued shares of VA Linux; 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 NAS (Network Attached Storage) arena, along with complimentary technical expertise in offering a number of storage solutions on Linux. The NAS market, according to International Data Corp., was worth $850 million in 1999.

VA Linux Systems officials said they expect to begin shipping NAS storage products in late 2000.

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

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