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To read comments to this article, go here
Mandrake and Conectiva Merge
Thursday, February 24 2005 @ 01:28 PM EST

I just got a notice from Mandrakesoft that it is merging with Conectiva. You can read the press release on their site, and I have reproduced the heart of it here as well. I thought you might like to know. I love Mandrakesoft, because they care about the desktop, and I find this news very exciting. I personally think US companies have been making a mistake concentrating so heavily only on the server and embedded space. There will be a conference call in about 25 minutes for the press:

Mandrakesoft will host a conference call to cover the event on Thursday, 24 February 2005 at 19:00 GMT (20:00 Paris Time, 14:00 AM EST, 11:00 AM PST, 16:00 Brazil (São Paulo)).

To participate by phone, please dial one of these numbers 10-15 minutes prior to the call:

866.682.6100 (Toll-free) from the United States
+1-201.499.0416 from outside the United States (example: from France, call 001-201 499 0416)

Participants will include François Bancilhon, CEO of Mandrakesoft, and Jaques Rosenzvaig, CEO of Conectiva. The conference call will start with a presentation, and then will host a Q&A session.

Callers should ask to be connected to the Mandrakesoft-Conectiva merger conference call.

UPDATE: I listened in. François Bancilhon, CEO of Mandrakesoft, and Jaques Rosenzvaig, CEO of Conectiva both spoke and then took questions. They will have a convergence product by the end of the year. They'll announce the name in about a month. Focus appears to be primarily business, but the desktop will also remain important. Mandrakesoft gets most of its revenue from selling products, not services. Conectiva does services. What the plan going forward will be wasn't clear in the teleconference, and my telephone was acting up, so emailed a followup question to Gael Duval, who says, "We are going to merge all our product & services lines progressively." The merged company will remain fully compliant with the principles of Open Source, Mr. Bancilhon said, and they are a GPL company. There will continue to be a free version.

Mandrakesoft had no presence in South America before. That is where Conectiva is stronger, obviously, and in S.A., the issue isn't upgrading; it's deployment of any technology, Rosenzvaig said, and the first goal there is business. He said the government there in Brazil is already fond of Mandrakesoft's software. Also, Conectiva is knowledgeable in the embedded area.

Maureen O'Gara had it in her head that Red Hat had an equity position in Conectiva, but she was disabused of that notion. The headquarters for the merged company will be in Paris. With respect to SCO, Conectiva was asked if there were any contract issues still hanging in the air from United Linux. The answer given was no, that there was a contractual relationship with SCO regarding development of a common product, which obviously isn't happening. That was the contract and there are no issues left, they said. Rosenzvaig also pointed out that in S.A., software is not IP-driven.

*****************************

Linux companies Mandrakesoft and Conectiva Announce Definitive Merger Agreement 2005-02-24

Paris, France; Curitiba, Brazil; February 24th , 2005 - Mandrakesoft, the number one European Linux company, today announced a definitive agreement to acquire Conectiva, the number one Linux company in Brazil and Latin America. This acquisition is expected to increase significantly Mandrakesoft's size and R&D capabilities.

Conectiva, founded in 1995, employs 60 people and has offices in Curitiba, São Paulo and Manaus, Brazil. The company had 1.7 million EUR (2.2 million USD) of revenues in their latest audited fiscal year, and reached break-even during the latest fiscal half-year. Conectiva has gained significant recognition for its adaptive approach to technology development for corporations, communities and large partners in the communication and technology sector in Latin America.

Providing Linux services for corporations since its inception, Conectiva has a wide range of projects including ATM and teller solutions for financial institutions, infrastructure for the government, and a complete range of Linux solutions sold through major retail stores in Brazil. Conectiva's technical achievements are also well known in the worldwide Linux community. Among them, the RPM port of apt-get (apt-rpm) and the new Smart Package Manager are just two examples of Conectiva's accomplishments. In this context, Conectiva has long been sought by larger technology and communication industry players to develop specialized solutions, including embedded devices.

Well-known customers include public sector and large accounts such as HSBC, Casas Bahia, IBM, HP, Siemens, White Martins-Praxair, Generali, and the Brazilian Army, Navy and Air Force. Examples of large deployments by Conectiva include 15,000 desktops and 800 servers in the São Paulo public schools. Conectiva also has a strong position in the training business, training more than 15,000 people each year through its network of partners throughout Brazil.

Mandrakesoft, founded in 1998, is the internationally recognized number one European Linux company. Mandrakesoft has built its business by designing and delivering user-friendly Linux products to both individuals and businesses, building a user base of more than 4 million users. In its latest fiscal year, Mandrakesoft's revenues reached 5.18 million EUR (6.7 million USD) for a net income of 1.39 million EUR (1.8 million USD).

Mandrakesoft is also recognized as offering increasingly strong business solutions in both Europe and the USA. These solutions include server and desktop products for corporations, dedicated support, training, and online services such as Mandrakeclub and Mandrakeonline. Mandrakesoft's customers include such prestigious corporations as Carrefour, France Telecom, HP, Macif, Total, Verizon, and many government agencies including several French ministries.

Mandrakesoft is acquiring all shares of Conectiva for a total amount of 1.79 million EUR (2.3 million USD) in stock.

Both Mandrakesoft and Conectiva are profitable companies. The resulting corporation will benefit from several synergies by sharing development resources, commercial prospects and larger economies of scale, resulting in improved development potential for both companies.

"This merger is a great opportunity for Mandrakesoft and Conectiva. It is clear that it will strengthen us by creating commercial and technological value", said Jaques Rosenzvaig, CEO of Conectiva. "The merger also positions the resulting company as a leading worldwide provider of Linux."

"Combining the two businesses enables us to extend the scope of our offering and address more businesses by compounding development and commercial assets, resulting in strong synergies", added François Bancilhon, CEO of Mandrakesoft. "Mandrakesoft and Conectiva are dedicated to delivering innovative and quality products with a high level of personalized services to our customers. Our aggregated strengths will enhance extensive deployments, thus providing greater opportunity for continued expansion."

Conectiva's acquisition is in line with Mandrakesoft's strategy to expand through both organic and external growth. Besides the commercial potential to address the Latin American market, the choice of Conectiva was strongly based on the cultural fit which exists between the two companies.

Mandrakesoft and Conectiva are both founding Members of the Linux Core Consortium (LCC), which has recently started development of a common implementation of the Linux Standard Base. The combined companies will build their next corporate releases on top of the LCC implementation.

Conference call for press:

Mandrakesoft will host a conference call to cover the event on Thursday, 24 February 2005. To participate, please check the URL below: http://www.mandrakesoft.com/company/press/event

About Conectiva

The company was founded in 1995 and is the pioneer in the distribution of Linux and Open Source in Portuguese, Spanish and English for all of Latin America. Besides customized Linux distributions for the Latin American market, Conectiva develops a series of products and additional services directed at the market demand for Open Source Tools, consulting services, training and technical support, including books and manuals. The company is also sought after its highly regarded OEM programs, application ports and training kits.

http://www.conectiva.com.br


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