Yesterday, the world's leading provider of open source solutions to the enterprise, today announced that it has entered into a definitive agreement to acquire JBoss, the global leader in open source middleware. By acquiring JBoss, Red Hat expects to accelerate the shift to service-oriented architectures (SOA), by enabling the next generation of web-enabled applications running on a low-cost, open source platform.

"It is at Red Hat's very core to help unlock the power of open source and open communities to innovate across industries, geographies and economies," said Matthew Szulik, Chairman and CEO of Red Hat. "Red Hat and JBoss are fully aligned around the belief that the open source development model continues to change the economics of enterprise IT in favor of the customer, and we truly believe in the potential of software innovation, once freed from the fetters of proprietary development."

Red Hat will acquire JBoss for approximately $350 million in initial consideration, plus approximately $70 million subject to the achievement of certain future performance metrics. The transaction consideration is composed of approximately 40% in cash and 60% in Red Hat common stock.

With each committed to advancing open source software and its collaborative development model, Red Hat and JBoss have been recognized as open source leaders. The large and vibrant communities around Linux and JBoss prove that the open source development model creates innovative, quality software, while providing a flexible and low cost model for customers. This acquisition is expected to accelerate enterprise adoption of open source infrastructure, and broaden the entire market opportunity for existing and new Red Hat and JBoss partners who are building value-added enterprise solutions.

Prashanth Rai