Marc Fleury has been famous since the start of JBoss for being non-traditional and aggressive - leading his company to a 35% market share in the application server market, outperforming larger companies such as IBM and BEA. After rumors of a potential Oracle acquisition, last week saw the Red Hat acquisition of JBoss for an outstanding $420M consideration ($350M in cash and stock, and a $70M earnout). Matrix Partners, Accel Partners and Intel Capital were the three backers of the company, having invested $10M in the company back in 2004 - raising eyebrows from the community at that time - remember JBoss is “free” (as in open source free).
From a multiple perspective, the acquisition price is an impressive 25X of last year's revenue, and 8x of this year's forecast. Not bad in a world where traditional enterprise software companies sell for 4 to 5X revenues. As David Berlind puts it in this piece, this is a validation of the open source business model for software companies - that manage to reach a leadership position in their market.
Congratulations to Marc (who shares his thoughts on the acquisition here) and his wife and business partner Nathalie, and investors David Skok (his views on JBoss' success here) and Peter Fenton.
Tags: jboss
And who said all the strategic buyers are gone from the software industry?
Great to see some renewed energy and interest in the market.
Posted by: Dharmesh Shah | April 18, 2006 at 04:03 PM