Red Hat snaps up C2Net Software

Red Hat Inc. (Nasdaq: RHAT) said Monday it would buy privately held C2Net Software, Inc.

Shares in the provider of software and services for open-source operating system Linux slipped recently as the stock was downgraded when the company's CFO departed. Shares closed at 20 1/16 Friday.

Red Hat said the acquisition of C2Net, its fifth this year, will add security to its capabilities of OS development, tools and e-commerce.

C2Net Software is the developer of the Apache-based Stronghold secure web server. C2Net customers include Amazon.com (Nasdaq: AMZN), Ameritrade (Nasdaq: AMTD) and IBM (NYSE: IBM).

Under the terms of the deal, Red Hat will issue about 1.99 million shares in exchange for all outstanding securities of C2Net. The transaction will be valued based on an average closing price of Red Hat's shares for the 7-day period ended August 16. The acquisition will be accounted for as a purchase and is expected to be completed by August 31.