I became a Forbes contributor in April 2011. The opinions expressed are those of the writer. So what better time to make the biggest acquisition in its history. Red Hat provides services for its version of the open-source free from licensing costs Linux software operating systems, middleware, storage, virtualization, and management tools. The company reports revenue through two categories: subscriptions, and training and services. The Americas contributed approximately 64% of total revenue in fiscal 2018; Europe, the Middle East, and Africa contributed 23%; and Asia-Pacific contributed 14%, according to r. Red Hat is a steadily growing and profitable company that throws off lots of cash. In the last five years, sales have increased at a 17. Sadly, Red Hat slipped in its most recent red hat acquisitions. Investors do not love this deal — sending its shares down over 4% on October 29. And I think it fails three of the four tests for successful acquisitions. I have no financial interest in the securities mentioned in this post. To be fair, Red Hat competes in an attractive industry. If software is eating the world — and with digital transformation occurring across industries, it truly is — open source is the key ingredient. Net Present Value Greater Than Zero: Fail By paying so much for Red Hat, it will take some heroic assumptions for this deal to generate a positive net present value. This is not much but it could end up being worse. Of course, companies who previously bought from Red Hat because it was perceived as neutral, may decide to switch red hat acquisitions a still-independent rival. One factor causing people to leave is a change in its culture. And Red Hat believes that preserving its culture is critical to its success. According to its latestWe believe that a critical contributor to our success has been our corporate culture, which we believe fosters innovation, creativity and collaboration. As our organization grows, our employees including remote workers and our resources become more globally dispersed and our organizational management structures become more complex, we may find it increasingly difficult to maintain these beneficial aspects of our corporate culture. If we are unable to maintain our corporate culture, we may find it difficult to attract and retain motivated employees, continue to perform at current levels or execute on our business strategy. As a result, our business, financial condition, operating results and cash flows could be adversely affected. Buy and ; Follow me on ; Find me on ; View my ;Take my EdX course. red hat acquisitions
