Red Hat Inc., a developer of open source software, said Monday it has agreed to buy software maker JBoss for $350 million in stock and cash.
The acquisition, split 40 percent to 60 percent between cash and Red Hat common stock, is expected to be completed in May.
In addition to the $350 million initial payment, Red Hat could pay a $70 million bonus depending on future performance.
Open-source operating systems such as Linux allow users to copy, distribute and modify the program’s code. Proprietary systems such as Windows do not allow users to modify its secret code.
Red Hat develops software based on the Linux system and refines it for business and government users. JBoss, based in Atlanta, makes middleware, a type of software that connects different applications.
Red Hat reported at the end of last month that its fourth-quarter profit more than doubled to $27.3 million, up from $11.8 million from the same period last year. Earnings per share for the quarter that ended Feb. 28 rose to 13 cents from 6 cents in last year’s fourth quarter.
The company said the acquisition of privately held JBoss will likely hurt earnings slightly in the quarter ending Aug. 31, but probably have no impact on the full fiscal year.