May 22, 2019
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Suse is once again an independent company

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Open-source infrastructure and application delivery vendor Suse — the company behind one of the oldest Linux distributions — today announced that it is once again an independent company. The company today finalized its $2.5 billion acquisition by growth investor EQT from Micro Focus, which itself had acquired it back in 2014.

Few companies have changed hands as often as Suse and yet remained strong players in their business. Suse was first acquired by Novell in 2004. Novell was then acquired by Attachmate in 2010, which Micro Focus acquired in 2014. The company then turned Suse into an independent division, only to then announce its sale to EQT in the middle of 2018.

It took a while for Micro Focus and EQT to finalize the acquisition, though, but now, for the first time since 2004, Suse stands on its own.

Micro Focus says that when it acquired Attachmate Group for $2.35 billion, Suse generated just 20 percent of the group’s total revenues. Since then, Suse has generated quite a bit more business as it expanded its product portfolio well beyond its core Linux offerings and into the more lucrative open-source infrastructure and application delivery business by, among other things, offering products and support around massive open-source projects like Cloud Foundry, OpenStack and Kubernetes.

Suse CEO Nils Brauckmann will remain at the helm of the company, but the company is shaking up its executive ranks a bit. Enrica Angelone, for example, has been named to the new post of CFO at Suse, and Sander Huyts is now the company’s COO. Former Suse CTO Thomas Di Giacomo is now president of Engineering, Product and Innovation. All three report directly to Brauckmann.

SUSE buys HPE’s OpenStack and Cloud Foundry assets

“Our genuinely open, open source solutions, flexible business practices, lack of enforced vendor lock-in and exceptional service are more critical to customer and partner organizations, and our independence coincides with our single-minded focus on delivering what is best for them,” said Brauckmann in today’s announcement. “Our ability to consistently meet these market demands creates a cycle of success, momentum and growth that allows SUSE to continue to deliver the innovation customers need to achieve their digital transformation goals and realize the hybrid and multi-cloud workload management they require to power their own continuous innovation, competitiveness and growth.”

Since IBM recently bought Red Hat for $34 billion, though, it remains to be seen how long Suse’s independent future will last. The market for open source is only heating up, after all.

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Micro Focus sells Suse for $2.5B

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Suse, one of the longest-running commercial Linux distributors and, these days, a major player in the open-source infrastructure and management space, has been through a few ownership changes in recent years. Micro Focus acquired Suse from The Attachmate Group back in 2014, which itself had acquired Novell, the then-owner of Suse, in 2010. Today, Micro Focus announced that Suse is changing owners yet again, as private equity firm and venture capital fund EQT is acquiring Suse.

While the exact terms of the deal where not disclosed, EQT says the deal valued Suse at $2.535 billion.

Unlike other companies that have gone through this number of ownership changes, Suse has emerged stronger. What was once a solid Linux distribution for the enterprise is now a player in various open-source fields, with a focus on software-defined infrastructure and application delivery solutions, as well as other managed cloud services. The company currently has 1,400 employees and in 2017 it had sales of $320 million.

While the company managed to thrive under the Micro Focus umbrella, Micro Focus itself has hit some rough patches. Its last earnings report was a major disappointment, not in the least because the assets that it acquired from Hewlett Packard Enterprise for $8.8 billion in 2016 failed to move the needle. It’s maybe no surprise then that Micro Focus decided to sell off Suse in an effort to refocus its business.

It’s worth noting that EQT makes for an interesting acquirer. The firm’s current portfolio includes a range of technology companies, though you probably haven’t heard of any of them, as well as a motley assortment of consumer goods businesses, real estate groups and healthcare services, with a few energy companies thrown into the mix.

“We were impressed by the business’ strong performance over the last years as well as by its strong culture and heritage as a pioneer in the open source space,” said EQT partner Johannes Reichel in today’s announcement. “These characteristics correspond well to EQT’s DNA of supporting and building strong and resilient companies, and driving growth.” EQT’s focus so far hasn’t been on open-source companies, though, so it’ll be interesting to see how this will play out. Because Suse will essentially remain independent, though, chances are we won’t see any changes in its involvement with the open-source community.

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