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UnXis Claims It's the "Selected Buyer" of SCO Software Business; Will Restore it to Glory
Friday, February 04 2011 @ 05:38 PM EST

UnXis has put out a press release [PDF] saying that UnXis is the "selected buyer" for SCO's "software product business". H-Online has more details. While the press release mentions in passing that they still have to present the deal to the court on February 16, they make it sound like a done deal:
The acquisition of SCO by UnXis puts a definitive close to years of uncertainty and speculation surrounding the future of SCO OpenServer and UnixWare product lines by UnXis.
Well, not yet. Eric Le Blan, now called Vice Chairman of UnXis, is quoted as speaking "outside the courtroom", of all odd things to mention in a press release. Who is he supposed to be talking to for a press release? Is this more SCO street theater? Le Blan says UnXis will restore SCO to its "former glory". And "UnXis will soon emerge as a major player in the information technology industry."

Uh oh. There seems to be a disconnect with reality in this picture. UnXis has no history in software. What I keep remembering is that UnXis tried to buy SCO once before, and the court wouldn't let it happen. Maybe the press release is to impress the judge. Who else would believe it at this point? Investors, maybe? You can't find a dumber bunch, from all we've seen in the SCO saga.

I take this more as PR for the court and for the market, because while they talk like it's a done deal, unless the fix is in, the Delaware court has to approve this proposed deal, and there could be objections filed still.

Some have already been filed in connection with cure amounts on contracts supposedly transfering, by Novell and SUSE Linux, and by Oracle, by Receivable Management Services Agent for EMC, and some reservation of rights by Nortel Networks and by HP.

This is, after all, many of the same people, minus Stephen Norris from all we can see to date, that tried to buy SCO and were denied by the court, with the same judge who must approve this deal saying it didn't seem like "the sale has a sound business purpose" and the sales plan raised "doubts of the parties' good faith." [Update: Norris showed up again a little later.]

Whatever might have given him that idea? Heh heh. Let's see. Here's what the plan was alleged to be last time. Note the desire for investment. Here's what IBM said the last time and Novell and SCO's response. One question raised last time was in essence how was SCO going to pay anything to creditors if all the blood is drained from the corpse? If the bankrupt has assets, which it is proposing to sell off without paying the creditors or arranging an escrow pool or anything at all, and without also sending the litigation, I read it as a rather clear message that nobody intends to pay any damages to any of the victims of the SCO litigation machine. This time, the terms are changed some, and perhaps the press release is to emphasize that this is an improved offer. Like it's maybe real?

Regular creditors, too, much as they might love to see SCO return to its "former glory", likely would prefer to be paid a little sooner than that possibility can be achieved. So I take this press release as an attempt to look more good-faithy. I can't imagine what they will tell the court about paying off anyone.

And some of us remember SCO's announcements in the past for deals that never went through, and they always sounded like done deals, even generated headlines, but none of them turned out to be realized. Without wishing to be snarky, the oddness of this press release doesn't inspire deep confidence that any of this is real either. Is it UnXis Inc. or UnXis Group, for example? But time will tell. Somebody is serious as a heart attack about keeping SCO afloat some kind of way.

Here is what Le Blan said about the UnXis plans:

Outside the court room, Eric le Blan, Vice Chairman of UnXis, commented: “We have acquired a great business with marquise customers in eighty one countries worldwide. We look forward to building upon it not only to serve the long unmet needs of existing customers; but also to introduce features and functionality for an entirely new generation of customers and products involved in the emerging cloud computing environment and software as a service arena. Our product management team is working with our channel partners to develop product road maps and feature lists in concert with SCO customers that will support the enterprise computing needs of our customers far into the future.”

“New feature sets will reflect our customer’s high performance computing priorities which include migration to a 64 bit processing environment and to incorporate such features as virtualization, clustering, and biometric authentication which are increasingly demanded for high performance “cloud” computing environments in which software is sold as a service. We are extremely confident that, with the support of our customers and business partners, we will rapidly restore SCO to its former glory and that UnXis will soon emerge as a major player in the information technology industry.”

A major player. With OpenServer. And UnixWare. Dream on, y'all. SCO has made those brands terminally toxic, I think. Everyone knows they sue their own customers, even sometimes years and years after the customer has stopped using their software, and if they go bankrupt they don't pay their creditors, and they don't stand by their contracts (ask Novell), so I really doubt this is a growth market. You can show hatred for GNU/Linux if you want to, but it pretty much means no one trusts you any more to have a tech future. Android relies on the Linux kernel after all ("Android relies on Linux version 2.6 for core system services such as security, memory management, process management, network stack, and driver model. The kernel also acts as an abstraction layer between the hardware and the rest of the software stack."). Maybe they can sell overseas where people don't know SCO's history. Maybe they can sell it in China and Russia and Myanmar or whatever. They don't know SCO like we do.

They seem to be planning something involving virtualization, clustering, and the cloud. Let's think about this as if it is true.

Clustering. Virtualization. Hmm. Let me guess. They want to sue IBM and Oracle and Google and Amazon? Or, hey, Canonical. Kidding. Well...

Richard Bolandz has been announced as the Chief Executive Officer of UnXis, and they claim they will keep pretty much all the employees in sales, support and technology professionals, none of whom to my knowledge are still there, the techies, I mean, or maybe one or so, but maybe they'll look for them elsewhere. Jeff Hunsaker has a page on Naymz with an "endorsement" from Ralph Yarro that makes it look like he'd like to recommend him for a job.

The full press release:

Immediate Press Release

January 26, 2011

UnXis Group Acquires SCO

Salt Lake City, Utah, USA

UnXis Inc. announced today that it has been selected as the buyer for the software product business of The SCO Group Inc. (Pink Sheets: SCOXQ) www.sco.com the leading provider of UNIX ® software technology. On February 16, 2011 the sale will be submitted for approval to the Bankruptcy Court where SCO’s chapter 11 case is pending.

The acquisition of SCO by UnXis puts a definitive close to years of uncertainty and speculation surrounding the future of SCO OpenServer and UnixWare product lines by UnXis.

Mark Fisler, of Ocean Park Advisors, the financial advisors to the Chapter 11 trustee for SCO, stated: “Following a vigorous marketing and sales process, we are satisfied that this transaction is in the best interest of SCO customers, employees and business partners.”

Outside the court room, Eric le Blan, Vice Chairman of UnXis, commented: “We have acquired a great business with marquise customers in eighty one countries worldwide. We look forward to building upon it not only to serve the long unmet needs of existing customers; but also to introduce features and functionality for an entirely new generation of customers and products involved in the emerging cloud computing environment and software as a service arena. Our product management team is working with our channel partners to develop product road maps and feature lists in concert with SCO customers that will support the enterprise computing needs of our customers far into the future.”

“New feature sets will reflect our customer’s high performance computing priorities which include migration to a 64 bit processing environment and to incorporate such features as virtualization, clustering, and biometric authentication which are increasingly demanded for high performance “cloud” computing environments in which software is sold as a service. We are extremely confident that, with the support of our customers and business partners, we will rapidly restore SCO to its former glory and that UnXis will soon emerge as a major player in the information technology industry.”

In order to maintain continuity with SCO customers and strategic partners and to insure a smooth management transition, UnXis has further announced that it has retained substantially all of the sales, support and technology professionals, thereby preserving the strong customer focus that has always been central to the corporate culture of SCO.

Hans Bayer, Vice President of SCO Worldwide Sales remarked: "We are delighted that after years of shifting targets, that under the UnXis ownership, we now will be prepared to create a truly customer driven, fully supported, open systems platform for high reliability enterprise computing.”

UnXis will be headed by Richard Bolandz as Chief Executive Officer. Mr. Bolandz brings to SCO decades of experience as senior software technology executive including prior positions as CEO of Linguateq Telecommunications Software, CEO of New Star Collaborative Technologies, Chief Information officer of Qwest Communications, Senior Vice President of Strategy and Technology for MCI Communications and President of PHH Technology Services, and North East Regional Sales Director for Unisys Global Outsourcing and Infrastructure Services.

Update: I thought you'd like to see the press release SCO put out about UnXis buying SCO the last time they tried (http://www.sco.com/company/legal/overview.html), remembering that some terms are different now, but just to show you that they sounded like it was practically a done deal last time too, but it was illusory -- and also to show you some background on who formed UnXis:
unXis to Acquire SCO's UNIX Business

On Monday, June 15th, SCO notified the bankruptcy court that The SCO Group had signed a definitive Purchase and Sale Agreement with unXis, Inc. (unXis) which we believe should help resolve in our favor the motions by IBM and Novell (and the US Trustee) to convert our Chapter 11 bankruptcy case to a case under Chapter 7 liquidation. This sale of the UNIX business, and some mobility assets, to unXis would favorably resolve the bankruptcy for our creditors, customers, shareholders and partners.

Throughout the entire process, SCO has worked very hard to provide a path out of bankruptcy and to emerge as a successful business that would give confidence to our customers and partners that they can continue to rely on SCO UNIX products. During the previous eighteen months, SCO has reviewed offers and proposals from a number of different groups and concluded that the one presented by unXis would best help us to achieve our goals.

The Court has set the date of July 27th to review the agreement and motions and has stated that it will enter a decision within a few days thereafter. SCO is confident and optimistic that the agreement with unXis will satisfy all conditions and parameters to allow SCO to pay its creditors, satisfy any legal claims, emerge from bankruptcy and to move the UNIX business forward with unXis in a very exciting way.

The Purchase and Sale Agreement (PSA) has been signed by The SCO Group and certain of its subsidiaries as sellers and unXis, as buyer, pursuant to which the UNIX product business will be sold to unXis. unXis has been organized by Gulf Cap Partners LLC and the MerchantBridge Group. MerchantBridge is a London-based private equity and direct investment company with strong links in the Middle East and a prestigious pedigree of transactions in the telecommunications and related sectors (www.merchant-bridge.com). Gulf Cap Partners was formed by a number of private equity professionals from the US and the Gulf to take advantage of the substantial changes in the private equity markets brought about by the financial crisis (www.gulfcappartners.com). Both Gulf Cap Partners and MerchantBridge will take an active role in the management of unXis.

A few of the key components of the PSA are as follows:

  • The buyer's management team is expected to consist of new and existing SCO management that will lead the UNIX business forward.
  • The SCO Group will continue with certain natively grown Me Inc. mobility applications and continue its efforts to reach a successful conclusion of litigation issues related to Novell, IBM, RedHat, and AutoZone and other potential defendants. Darl C. McBride will continue as CEO of The SCO Group.
  • Most of the current SCO staff, including developers, support personnel, sales and marketing are expected to join unXis.
  • All UNIX products as well as the SCO Mobile Server products will be sold to unXis.
  • OpenServer and UnixWare product lines will be kept up to date and maintained into the future with new product roadmaps.
  • Significant investment will be put into "virtualization" products.
  • Significant investment will be made to develop and market a next generation UNIX operating system platform.
SCO customers and partners can feel confident that they will be able to continue to purchase licenses, receive support and development for the core SCO UNIX products now and into the future.

Frequently Asked Questions

To assist with specific questions SCO customers have asked, below is a brief FAQ to reference:

Q: How do I continue to purchase SCO licenses and receive SCO technical support during this transition time?

A: SCO will continue as a separate entity until the purchase agreement is approved by the Bankruptcy Court and the transaction is closed. Customers will continue to purchase SCO licenses from their respective SCO distributor and/or reseller. This process has not changed.

For customers with a current SCO support contract, SCO will continue to provide support, honor, and fulfill all existing UNIX product commitments. In short, business continues without interruption, even after the asset sale is approved and the asset purchase agreement is finalized.

Q: How will this sale affect me as a customer?

A: Customers should feel confident with the sale as unXis is committed to continued OS product development and resources, building a next generation OS for future computing needs and leveraging SCO's platform expertise and worldwide distribution. In short, customers will see expanded distribution networks, additional industry partners and enhanced OS product roadmaps for the new company.

Q: When the sale is approved by the Bankruptcy Court, how will SCO be structured?

A: Contingent upon the Court's approval, the approach will be that The SCO Group will retain the UNIX rights it requires to continue pursuing its pending litigation and related claims, and unXis will receive all rights it requires to operate the UNIX business in the future. SCO's current portfolio of mobile applications will also remain with SCO under the direction of Darl McBride. unXis will focus on the development, support, and sale of the SCO UNIX products. unXis will provide all necessary departments, including engineering development, worldwide sales, technical support, marketing, finance and others. With SCO's 25+ year UNIX heritage, unXis should be positioned to focus on building a next generation OS platform and focus on the needs of our customers. unXis will not be involved as a party to any of the SCO litigation. Additionally, with certain exceptions, most customers of unXis will not be subject to claims by SCO.

Q: Will unXis be involved in, or exposed to, the existing litigation?

A: No. unXis has no interest in any SCO litigation and will focus on developing new generation systems addressing the current and future needs of its customer base. Upon approval of the court, unXis and its major customers will be fully protected against the existing litigation.

Q: If I have an existing customer support agreement with The SCO Group, will it transfer automatically to unXis?

A: Yes. Any written agreement you have with The SCO Group will be honored by unXis.

Q: Will unXis continue to distribute UNIX products through SCO's traditional channel or will that change?

A: The SCO Group will be transferring all distribution agreements with current channel partners to unXis. There will be no interruption in the method of distributing products.

Q: When is the transaction expected to close?

A: The Bankruptcy Court is expected to review the proposed sale on July 27 th and make a ruling within two days. We expect the transaction to close shortly thereafter.

Q: Whom do I contact with further sales or company related questions?

A: For customers who have one, you will continue to communicate with your existing SCO Account Manager now and in the future. SCO has an existing worldwide sales infrastructure in place to handle your questions and to ensure that you are able to purchase SCO products uninterrupted.

For those customers without a SCO Account Manager, please contact our SCO Sales desk at sales@sco.com.

Forward Looking Statements

Cautionary Statement Regarding Forward-Looking Statements

This document is for informational purposes only and may not be incorporated into a contract. This document contains certain forward-looking statements about The SCO Group, including statements that involve risks and uncertainties concerning SCO's proposed sale to unXis, anticipated product information, estimates of future results of operations and general business outlook. When used in this document, the words "anticipates", "estimates", "may", "can", "will", "believes", "expects", "projects", "intends", "likely", similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. Any such statement may be influenced by a variety of factors, many of which are beyond the control of The SCO Group, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this document due to a number of risks and uncertainties. Potential risks and uncertainties include, among others, the possibility that the transaction will not close or that the closing may be delayed, general economic conditions, and the possibility that The SCO Group may be adversely affected by other economic, litigation related, business, and/or competitive factors. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of The SCO Group.

In addition, please refer to the documents that The SCO Group files with the Securities and Exchange Commission (the “SEC”) on Forms 10-K, 10-Q and 8-K. These filings identify and address other important factors that could cause The SCO Group's financial and operational results to differ materially from those contained in the forward-looking statements set forth in this document. You are cautioned to not place undue reliance on forward-looking statements, which speak only as of the date of this report. The SCO Group is not under any duty to update any of the information in this release. Additional Information about the Sale and Where to Find It

In connection with the proposed sale, The SCO Group will file the agreement with the Bankruptcy Court. Additionally, The SCO Group will file other relevant materials in connection with the proposed transaction with the Bankruptcy Court in connection with its motion to approve the transaction.


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