Confirmed: Mandriva in Acquisition Talks

French open source firm LINAGORA has confirmed it's exploring a purchase of Mandriva.

After years of fiscal ups and downs, it now appears Mandriva S.A., makers of the Mandriva Linux distribution, may be up on the seller's block.

Reports from the community site Mandriva Linux Online (MLO) this weekend indicated that Mandriva appears to be the flower around which two bees were buzzing: namely, UK-based software-as-a-service provider lightapp, and the French open source software firm LINAGORA.

It now appears that one of those companies, LINAGORA, has confirmed that it is indeed in discussions with Mandriva for a possible investment or acquisition. A (translated) statement from the press release indicated:

"LINAGORA is a major player in the innovation of Open Source software and is thus searching for any opportunities to develop and reinforce its leadership position in France and in the world... For this reason, discussions are in progress with Mandriva to purchase outstanding shares of the company."

Mandriva is a publicly traded firm listed on the Paris Euronext Marché Libre.

An acquisition from either company might be the ultimate denouement for the company, once known as Mandrake Linux. Despite it's continued popularity in the community, Mandriva was unfortunately not able to capture much market share in the enterprise arena, even after Mandrake Linux purchased South American Linux vendor Conectiva to become Mandriva. In the early part of last decade, the company made repeated efforts to crack into the US markets, but was unable to achieve much success against Red Hat and, later, its European rival S.U.S.E. GmbH, which did make a successful Atlantic crossing by virtue of its acquisition by Novell.

That Mandriva suffered financial difficulties was widely known, especially after the company declared redressement judiciaire (the French equivalent of Chapter 11 bankruptcy in the US) in March 2004. In 2005, Mandriva successfully exited the bankruptcy phase of its existence and then-CEO François Bancilhon was prepared to take Mandriva's product line straight to Red Hat and Novell, in whatever arena the US companies cared to compete--including, Bancilhon emphasized, right in their back yard.

That may not have happened according to plan. Indeed, in the late winter of 2007, two major French enterprise deployments were announced. In February, French automaker Peugeot Citroen revealed it would be migrating 20,000 Windows desktops to SUSE Linux Enterprise Desktop. Then, in March, the French Parliament, which had already decided to shift its administrative systems to Linux, announced the finalization of its plans to migrate to Ubuntu. Notably, Mandriva was not a part of either of these migration announcements.

It remains to be seen, of course, what will happen to Mandriva if and when an acquisition takes place. Since both lightapp and LINAGORA seem to run in the SaaS sector, it's a fair bet that Mandriva technology will be folded into those business plans. What is not clear is whether Mandriva would remain a separate business entity.

For its part, Mandriva is being suitably vague, acting the role of potential acquisition target to perfection. When asked to comment, a spokesperson for Mandriva replied with this boilerplate answer:

"Mandriva, from its very beginning, has been involved in takeover talks. Mandriva bought Edge-IT, Conectiva Inc and Linbox FAS and has been attracted by other possible ventures. Mandriva has also been in talks over merger possibilities or an eventual buy-out by investors. These negotiations has been pursued throughout the life of the company and continue.

"Mandriva has been affected by the economic slow-down and we took advantage of this period to develop and improve our products--an operating system dedicated to a uniquely ergonomic server (MES5.1), the most reliable free machine-management software on the market (Pulse2), Mandriva Smart Desktop to simplify the use of office desktops, education-dedicated distribution, all embrace the Mandriva philosophy of alternative options.

"We are beginning to harvest the results of this development work with hundreds of thousands of PCs using the Mandriva OS sold in South America and rapid sales of Pulse2 and MES5 in Europe.

"So it is unsurprising that Mandriva has once again attracted the interest of industry decision-makers," the statement concluded.

Let's see how that interest plays out.

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