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Red Hat buys network gear maker

The Linux firm plans to issue about 1.5 million shares of its common stock in exchange for all outstanding shares of privately held WireSpeed Communications.

Red Hat today acquired privately held WireSpeed Communications in a stock deal.

The transaction value will be based on an average closing price of Red Hat's common shares for the five-day period ending tomorrow. That pegs the deal at roughly $33 million.

Red Hat, which sells software and technical support for Unix-like operating system Linux, will issue about 1.5 million shares of its common stock in exchange for all outstanding WireSpeed shares. Red Hat may issue additional shares based on the future performance of WireSpeed.

Huntsville, Ala.-based WireSpeed develops network and telecommunications components that connect handheld appliances to the Internet and private networks, the company said.

WireSpeed's clients include Hewlett-Packard, Interphase, NETsilicon and STMicroelectronics.

The company will become part of Red Hat's client services group, a unit that targets embedded, networked and post-PC devices.

The acquisition will be accounted for as a purchase and is expected to be completed by July 31, 2000, subject to customary closing conditions.