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Europe-based Linux distributor Mandrakesoft S.A. on Thursday said it has agreed to acquire Brazilian company Conectiva S.A. in an all-stock deal valued at $2.3 million.
The acquisition would bring together two second-tier Linux companies, forming a combined business with $8.9 million in revenues.
The deal would extend Mandrakesoft's reach into Brazil and Latin America, and strengthen its research and development capabilities, company officials said. Both companies distribute desktop and server versions of Linux, and sell support services.
"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," Francois Bancilhon, chief executive of Paris-based Mandrakesoft, said in a statement.
Under the deal, Mandrakesoft is acquiring all shares of Conectiva for $2.3 million in stock.
Connectiva, founded in 1995, employs 60 people in offices in Curitiba, Sao Paolo and Manaus, Brazil. The company reached break-even during the first half of its current fiscal year, officials said.
Both companies are founding members of the Linux Core Consortium, an organization formed to develop technology that would potentially make it easier for software makers to build products for multiple distributions of the open-source operating system.
The LCC is developing a runtime environment and software development kit that would standardize programming of software to the interfaces of the Linux kernel.
The combined company of Mandrakesoft and Conectiva plans to build its next corporate releases on top of the LCC implementation.