France's Mandrakesoft plans to acquire Brazil's largest Linux vendor, Conectiva.
The two companies have entered into a definitive agreement that would see Mandrakesoft purchase the company in exchange for $US2.36 million in stock.
With more than 3 per cent of the worldwide Linux market, MandrakeSoft is the number four Linux vendor, after Red Hat, Novell, and Turbolinux, according to research firm IDC.
IDC ranked Conectiva number six worldwide in 2003, the last year for which data was available. The company employs 60 people in offices in Curitiba, San Paulo and Manaus, Brazil.
The acquisition will strengthen Mandrakesoft's international position and offer the company "greater opportunity for continued expansion", chief executive officer of Mandrakesoft, Francois Bancilhon, said.
Mandrakesoft had revenues of $US6.83 million and a net income of $US1.83 million during its most recent fiscal year, the company said. This represents quite a turnaround for a company that three years ago was appealing directly to users for help paying the bills. Mandrakesoft entered into bankruptcy in 2003, and emerged in March 2004.
Neither Mandrakesoft nor Conectiva were available for comment on this story.