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VA Linux to acquire two more companies

The acquisitions are the latest in a spate among Linux companies, which are snapping up smaller entities about as fast as entrepreneurs can start them.

VA Linux Systems will acquire two hardware companies in cash and stock deals worth about $189 million and $38 million, the company said today.

The acquisition of TruSolutions will give VA Linux a new slim server design alongside a new Network Engines design that VA began selling today, VA chief executive Larry Augustin said. The acquisition of NetAttach will help VA build storage systems made of stacks of servers bolted to racks, he said.

The acquisitions are the latest in a spate among Linux companies, which are snapping up smaller entities about as fast as entrepreneurs can start them.

VA--a company whose record IPO gave it valuable stock--already spent about $1 billion acquiring Andover.Net in February. Lineo, which is aiming Linux at non-PC devices, has acquired three firms.

Linuxcare bought the Puffin Group, Prosa and Cheek Consulting. And Red Hat, the Linux seller that was first to spark the Linux-related IPO frenzy, has acquired Cygnus Solutions and Hell's Kitchen.

VA Linux plans more acquisitions to bolster its Linux computer line, its services and its programming talent, Augustin said. Linuxcare, a seller of technical support and consulting services for Linux planning an initial public offering next week, would make sense as an acquisition, but "I don't think we've had any detailed discussions," Augustin said.

TruSolutions will be acquired for 1.8 million VA shares and $10 million cash, a total of about $189 million based on today's closing price of $99.50. The NetAttach acquisition is for 286,000 shares and $10 million cash, a total of about $38 million.

TruSolutions, based in San Diego, brings about 60 new employees to VA. NetAttach, a start-up in Santa Clara, Calif., brings about a dozen, Augustin said.

VA's stock has been slipping since its IPO in December, and today it sank below $100 for the first time.

"The market was down a lot today," Augustin said. "I think we CNET's Linux Center went down less than the market overall."

The Caldera Systems IPO is expected later this week, while Linuxcare is expected to go public next week. His company will be insulated from those events to an extent, Augustin said, because investors are beginning to be able to distinguish one Linux company from another.