Mandrakesoft, Conectiva to merge [LWN.net]

From:		Mandrakesoft Press <press-AT-mandrakesoft.com>
To:		lwn-AT-lwn.net
Subject:		[BREAKING NEWS] Linux companies Mandrakesoft and Conectiva Announce Definitive Merger Agreement
Date:		Thu, 24 Feb 2005 15:17:14 +0100 (CET)


___ For Immediate Release ___

Linux companies Mandrakesoft and Conectiva Announce Definitive Merger
Agreement


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 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 

About Mandrakesoft 

Mandrakesoft is the publisher of the popular Mandrakelinux operating
system, one of the most full-featured and easy to use Linux systems
available. The company offers its enterprise, government and
educational customers a complete range of GNU/Linux and Open Source
software and related services. Mandrakesoft products are available in
more than 120 countries through dedicated channels and also from
Mandrakestore.com, the company's online store. Number 1 in several
countries, Mandrakesoft has won many awards for quality and technical
innovation. "Born on the Internet" in late 1998, Mandrakesoft has
offices in the United States and France. Mandrakesoft is traded on
Paris Euronext Marché Libre (ISIN Code: FR0004159382/MLMAN; Reuters
code: MAKE.PA) and the US OTC market (stock symbol MDKFF). 

Http://www.mandrakesoft.com

(Log in to post comments)

Mandrakesoft, Conectiva to merge

Posted Feb 25, 2005 6:49 UTC (Fri) by horen (subscriber, #2514) [Link]

what happens when you mix French and Brazilian developers?

Uhhh, the "Tux" penguin drinking a Campari-and-soda, wearing a thong.

No comments

Posted Feb 25, 2005 7:02 UTC (Fri) by hingo (subscriber, #14792) [Link]

It seems that Mandrake news never generates any comments on LWN. So let's do my best...

This was bound to happen, I don't think it surprises anyone. It was just a matter of waiting until both companies are profitable and one get's big enough to "buy" the other.

The synergies are obvious, and the happy couple have been good friends for long. For as long as I can remember, Mandrakes has used the Galaxy theme, which is made by a Conectiva employee. Mandrake is the most popular user-friendly, user-oriented, desktop-oriented distribution. (Mandrake never told me to use Microsoft on the desktop!) But it will do Mandrake very good to have some of the Conectiva hackers on their rooster, not to mention the pure PR value of being the company to hire the stable kernel maintainer.

Further, both companies, or at least Mandrake, are rather small. Mandrake can barely spare one person to maintain the Club website, even though the Club brings in the majority of their revenue. And last but not least, territorially they don't overlap very much.

The interesting question is, how will the legacy of the two kingdoms be divided? Will urpmi or apt-rpm face retirement? Urpmi was one of the best things coming out of Mandrake. But for the larger community it would be beneficial to standardise on apt for both deb and rpm management. To make things more interesting, I think lately urpmi has actually surpassed the apt-suite in features. (Or maybe it's just me who has not followed up on apt.)

One final guess: They will drop the more known Mandrake name and use Conectiva. This is based on guessing that Mandrake has not got a very strong position in their trademark quarrel with Mandrake the Magician comic. This merger would give them an easy way out, without admitting guilt.

<Several> comments -- Mandrake/Conectiva

Posted Feb 25, 2005 11:30 UTC (Fri) by Duncan (guest, #6647) [Link]

I expect Mandrake to use this to lose that
name, for that reason, as well,
altho I'm not sure it'll be Conectiva they adopt. "Connectdrake", anyone?
<g> Maybe "Condrake"? <hmm... maybe not...> "Mandriva"? <g>

I'm glad Mandrake's getting some kernel folks with quite the name
recognition as well, in the form of Marcelo T., and R. Van Riel (is he
still with Conectiva?). Among other things, having that sort of known
kernel expertise should improve their chance at landing big accounts that
like that sort of technical resources available, making them more
competitive with Novell/SuSE and Red Hat. I know Mandrake had several
other community projects and the fact that they didn't go the freedom
lacking route of SuSE (worse b4 Novell) I always appreciated, but
Conectiva as small and mainly regional as it was got a lot of respect for
having those kernel hackers, that Mandrake was missing.

I was a Mandrake user for a couple years, but left them for Gentoo when it
became plain Mandrake wasn't interested in an up-to-date AMD64 release.
(Cooker for AMD64 basically consists of the latest community release of
their x86/i586 stuff, while i586 cooker has long since moved on to working
on the next release. When I left, Mandrake's KDE on AMD64 was fully two
release versions behind the official KDE release (and what was available
for x86 Cooker, which often had /pre/-release KDE available -- BTW, I'm
running KDE-3.4-rc2 on Gentoo/AMD64 as I write this). This was /not/ due
to any particular problem with porting to AMD64, either, as Gentoo had the
current KDE available for AMD64.)

Also, when I upgraded to my dual Opteron /desktop/ workstation, I set
reserved $100+ to go to Mandrake, as my distrib of choice at the time.
Unfortunately, try as I might, I couldn't find a suitable Mandrake product
to spend it on. (They didn't offer any personal/desktop AMD64 product for
purchase, only business, and that only as a set of physical CDs that would
be pretty much outdated by the time they shipped. Club? All it seemed to
be about at the time was i586. There was a torrent for amd64 released a
bit belatedly, but no AMD64 club forums, no way to vote for AMD64 in club
votes, etc. Further, both sets included some slaveware/proprietaryware as
well, and I've no interest in funding that, even indirectly. Ironically,
it would have been better for my relationship with Mandrake had I /not/
decided I wanted to spend money on them, as one doesn't expect as much
from a product one isn't paying for.)

Maybe with the developer team from Conectiva, this will change, altho I've
long since realized the Gentoo community distribution concept fits me
better anyway, and don't see it as likely that I'll be moving back,
personally. (If I did move back to a binary-emphasis distrib, it'd likely
be to the community based Debian, which is likely where I would have ended
up had it not been for Gentoo.) I'd still recommend Mandrake to those
Linux newbies on x86, however, particularly those with older equipment
that wouldn't take well to from source emphasis distributions like Gentoo,
and to those not so pleasurably challenged by the leading and sometimes
bleeding edge, as I find myself.

Duncan (still reflecting some of my frustration from the time)

<Several> comments -- Mandrake/Conectiva

Posted Feb 25, 2005 13:23 UTC (Fri) by corbet (editor, #1) [Link]

Actually, Marcelo and Rik both moved on to other employers a little while back...

<Several> comments -- Mandrake/Conectiva

Posted Feb 27, 2005 21:11 UTC (Sun) by hingo (subscriber, #14792) [Link]

"Mandriva"?

Man-diva!

Mandrakegalaxy

Posted Mar 5, 2005 16:47 UTC (Sat) by fcrozat (subscriber, #175) [Link]

> The synergies are obvious, and the happy couple have been good friends for > long. For as long as I can remember, Mandrakes has used the Galaxy theme,
> which is made by a Conectiva employee.

This is completely false. Mandrakegalaxy theme was done internaly at Mandrakesoft.

Mandrakesoft, Conectiva to merge

Posted Feb 25, 2005 14:31 UTC (Fri) by ecureuil (subscriber, #3507) [Link]

>What value do the companies hope to bring to one another

From the rumours, I've heard in the Parisian Solutions Linux show, the
fusion between Conectiva and Mandrakesoft brings a lot of synergy in
'packaging'. For the time being, Mandrakesoft has no top-notch kernel
packager/hacker. It makes sense to share one in the new entity and
Brazilians hackers cost less than French ones. So I believe that the two
product lines are going to merge their technical base and infrastructure
to share packaging work. It is also easy to work together on packaging
through the Internet. After that, the Brazilian market is different than
the French one and I guess that each entity will keep a large commercial
autonomy.
Culturally, I think it is going to go smoothly. It is easy for a French
to understand Portuguese Brazilian and vice-versa (the language barrier
is much lower than between Novell and Suse) and there is francophilia in
the Brazilian left. Big French companies (car, auto-parts) have also
large and succesful subsidiaries in Brazil.