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Linux-seller Caldera Systems sets IPO price

The company expects to raise between $35 million and $45 million in its upcoming initial public offering.

Caldera Systems, a seller of the Linux operating system, expects to raise between $35 million and $45 million in its upcoming initial public offering.

The company set a share price range of $7 to $9, Caldera Systems said in a filing with the Securities and Exchange Commission today. The company, which first filed in January to go public, expects to sell 5 million shares.

Caldera Systems is one of the four best-known sellers of the Linux operating system, which last year grew to become the second most popular operating system for servers after Windows NT, according to International Data Corp. Linux also competes with Unix, of which Linux is a clone. But Linux isn't as mature as Unix for heavy-duty servers.

Caldera Systems had revenue of $553,000 for the quarter ended Jan. 31, 2000, a slight increase over the $538,000 garnered in the same quarter a year ago, the company said. The company had a net loss of $5.5 million for the quarter, compared to a net loss of $992,000 the same quarter the year before.

Linux can be obtained for free over the Internet, so companies selling it typically provide enhancements beyond the basic software in their business plans. Enhancements include services such as customization or installation, convenience in the form of instruction manuals and CD-ROMs, or integration of Linux with other software. Caldera Systems aims to package its version of Linux along with e-commerce software and to make its version of Linux particularly good for special-purpose servers.

Because Linux is collectively created by open-source programmers all over the world who share their software improvements, Linux companies going public have undertaken "directed share" programs to reward those programmers. Caldera Systems is no exception, reserving up to 10 percent of the shares being offered in the IPO, the company said. "We currently expect that a majority of these shares will be offered to directors, officers, employees, business associates, open-source software developers and other persons who we believe have contributed to the success of the open-source software community and to the growth of Caldera Systems," the company said.

Caldera, though, has updated the process to include non-U.S. programmers who haven't been able to participate in past IPOs.

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Linux Center Red Hat, a seller of Linux that held an IPO in August, was the first Linux company to go public. Two others, hardware manufacturer VA Linux Systems and Linux and programming information site Andover.Net, went public in December, but VA now is acquiring Andover.Net. Cobalt Networks, which builds special-purpose servers using Linux, went public in November. Server maker eSoft also uses Linux in its products.

More Linux-related IPOs are in the pipeline. Linuxcare, which sells services such as customization, training or Linux software development, filed to go public shortly after Caldera Systems. Planning to go public later this year are Lineo, which sells Linux and associated software for sub-PC computing devices, and CyberNet Systems, which sells software for Linux-based specialized servers.

SuSE, based in Germany and one of the four best-known companies selling Linux, is another possibility. Though spokesman Carter Kohlmayer declined to comment on whether the company planned an IPO, he said if it did, the offering would likely involve both the U.S. and European markets.

TurboLinux, which sells Linux tuned to work with specific software, and Atipa, which like VA Linux Systems sells Linux computers and services, also are IPO possibilities.

Caldera Systems expects to trade under the symbol CALD on the Nasdaq market. Underwriters of the IPO are FleetBoston Robertson Stephens, Bear, Stearns & Co., Soundview Technology Group and First Security Van Kasper.