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BayStar Invests in UNIX Software Co in $50M PIPE
October 20, 2003

Larkspur, Calif.-based private equity firm BayStar Capital has led a $50 million round of financing in UNIX operating system owner SCO Group.

The investment was structured as a private placement of non-voting Series A convertible preferred shares which are convertible into common shares at a fixed conversion price of $16.93 per share. BayStar and its other investors will own approximately 17.5% of the company when it converts its shares.

SCO Group, based in Lindon, Utah, is the owner of the UNIX operating system. The company has a network of more than 11,000 resellers and 4,000 developers. SCO products include UNIX platforms; messaging, authentication, and e-business tools; and services that include technical support, education, consulting, and solution provider support programs.

“SCO owns the most predominant UNIX software assets in the I.T. industry, has a 20 year history of providing trusted software solutions to end users around the globe, and an aggressive and seasoned management team focused on generating profitable growth,” Lawrence Goldfarb, general partner of BayStar Capital, said in the statement.

Last December, BayStar Capital co-led a $200 million equity component in a $450 million round of investment in publicly traded XM Satellite Radio Holdings.

In October 2002, BayStar hired Gianfilippo Cuneo as a general partner to lead the firm’s Italian activities. Cuneo began his carrer for McKinsey & Co. in New York in 1964 and proceeded to open the firm’s Italian office in 1971. He became managing director of the Italian office and a director of McKinsey & Co. After leaving the firm, he started his own consulting firm. He also founded a private equity fund in partnership with Banca Commerciale Italiana in 1974.

BayStar Capital is a firm that invests in private equity and growth-oriented public companies in the technology and life sciences sectors. The firm’s typical investment ranges between $5 million and $50 million. The firm has invested $400 million since its inception in 1998. The firm also specializes in private investment in public entities, or PIPE, transactions.