NetComm gets stake in IPO-destined Lineo

Data communications vendor NetComm is unlikely to make Linux-related products part of its main line of business, despite a $2 million share investment in US-based Linux software specialist Lineo.

NetComm acquired an undisclosed stake in Lineo by default, following the acquisition of Moreton Bay, a Brisbane Linux developer, by Lineo earlier this year. NetComm had a 20 per cent stake and business relationship with Moreton Bay, effective from December last year.

As part of Lineo's acquisition of Moreton Bay, NetComm has exchanged its share holding in Moreton Bay for a stake in Lineo.

According to NetComm chairman Thomas Girgensohn, the investment is worth around $2 million at this time and is the "only significant" shareholder investment that NetComm holds in another company. It is also NetComm's only Linux investment. NetComm's original investment in Moreton Bay was $1 million.

Girgensohn said that NetComm expects the investment in Lineo to further increase in value when the company lists in the next three months.

According to Girgensohn, as part of its agreement with Moreton Bay, NetComm uses Moreton Bay technology in its products.

"We design and manufacturer products ourselves using Moreton Bay Technology . . . we're more modem-related. We're not selling Linux software," he said.

At this stage, NetComm is not interested in Linux as a main line of business; however, "it could complete our range of product", he said.

NetComm's original decision to invest in Moreton Bay was based on the explosive potential of Linux, officials said.

Meanwhile, Moreton Bay's offices in Brisbane are in the process of changing company names to Lineo, following the completion of the acquisition in May.

Company executives were unable to discuss the integration and future plans for the organisation, which now becomes Lineo's Australian arm. The company is in "a silent period" following the announcement of a planned IPO.

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