Red Hat Inc. –

DURHAM, N.C. – Red Hat, a developer and provider of open source software and services, went public August 11, offering 6 million shares at $14 apiece. The company’s stock priced at the high end of its $12 to $14 filing range.

Underwritten by Goldman, Sachs & Co., Thomas Weisel Partners, Hambrecht & Quist and E*OFFERING, the initial public offering left 66.8 million shares outstanding.

Venture backers included Greylock IX Limited Partnership, Benchmark Capital Partners II and Intel Corp. There were no selling shareholders.

Red Hat services the open source community with the Linux operating system and serves as a forum for open source software development, offering software downloads and a shopping site through redhat.com. Red Hat provides professional services including technical support, training and education, custom development, consulting and hardware certification.

Red Hat will use the estimated $76.9 million in proceeds from the offering for working capital and other general corporate purposes, including opening foreign offices or subsidiaries. The company may use a portion of the proceeds to acquire businesses, products and technologies that complement their own.

The company lost $91,000 in 1999, although it had been profitable for the previous two years, earning $33,000 in 1997 and $8,000 in 1998.

William Kaiser, a general partner of the Greylock Limited Partnerships, joined the company’s board of directors in September 1998, and Eric Hahn, a founding partner of Inventures Group, followed in April.


Red Hat – Selected Financial

(in thousands, except per share data)

Year Ended February 28 Three Months Ended May 31

1995 1996 1997 1998 1999 1998* 1999*

Total revenue 482 930 2,603 5,156 10,790 1,551 2,797

Net loss -128 -155 33 8 -91 -53 -2,089

Net loss per share -0.01 -0.01 0 0 -0.01 0 -0.09

*Unaudited