Caldera Buying SCO's Server, Services Units

FRAMINGHAM (08/02/2000) - After weeks of speculation about a possible sale of all or part of The Santa Cruz Operation Inc., the struggling software vendor Wednesday announced that it's selling both its server software unit and its professional services division to Caldera Systems Inc.

Under the deal, the two companies said, Orem, Utah-based Caldera will create a new company to offer an Internet-based computing platform that combines server applications and services running under both Linux and Unix. The platform will merge the scalability of Unix with the flexibility of the open-source Linux operating system, they said.

SCO will receive a 28 percent ownership stake in Caldera and US$7 million in cash as part of the deal, according to the companies. In addition, Orem-based The Canopy Group Inc., a major stockholder of Caldera, will loan $18 million to SCO, which will keep its Tarantella software division and the SCO OpenServer product line. The deal is expected to be completed by October.

Doug Michels, SCO's CEO, said in a statement that the sale will allow his company to focus on the Tarantella product line. The sale follows two straight quarters of losses by SCO, which last month announced that it had signed on an investment banking firm to help evaluate its options in light of the financial problems.

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