Lulu Press, a new venture formed by Red Hat founder Bob Young, has acquired the technology assets of online publisher OpenMind Publishing Group in a combination cash-and-stock deal.

As part of the purchase, Lulu assumed the lease of OpenMind’s offices and equipment in Cary. Lulu Press also offered jobs to all five employees left at OpenMind.

“It makes sense, since they know the technology,” says an OpenMind investor who spoke on the condition of anonymity. “This is a good way for Bob to bootstrap the operations of Lulu Press and save a lot of time.”

The source says the deal was completed last month.

It’s unclear what Young has in store for OpenMind’s software, but many believe that the open-source leanings of the technology attracted Young. Red Hat is one of the world’s leading Linux software companies. Whereas the Linux operating system encourages and allows individual programmers to contribute and improve the operating system, OpenMind’s OpenText Project is an online, collaborative publishing environment where instructors can share ideas and enhance existing content to create better educational materials.

Company officials at Lulu Press were unavailable for comment.

Call OpenMind’s old offices today and you’ll be greeted with a recording that says, “Welcome to Lulu Enterprises, home of Lulu Press and Lulu Technology Circus.”

According to the North Carolina Department of the Secretary of the State, Lulu Press was incorporated last July and Lulu Technology Circus in January 2002. Lulu LLC and Lulu Holdings were formed December 1999, most likely to act as personal investment vehicles for Young.

OpenMind retains the titles and contracts of specific books it was trying to market, and is likely to be liquidated in the near future, the source says.

Founded in 2000 by Bradley Schultz and Paul Elliot, OpenMind Publishing is a publisher of customized electronic texts for college professors. During its brief life, it raised approximately $3.1 million in venture capital funding from Fusion Ventures, Charlotte Angel Partners, Research Triangle Ventures, the Atlantis Group, NC Technological Development Authority, as well as a handful of individual investors. It raised its last round of financing
in December 2000 and received a bridge round last summer.

Lance Becker, now an employee of Lulu Press, assumed the role of CEO last October, replacing founding CEO Elliot, to continue OpenMind’s desperate hunt for cash.

“We would have loved to have been successful, but we weren’t,” says Elliot, who’s now working at international publisher John Wiley & Sons and in the process of helping the publishing giant launch a new e-learning group. “I still believe in the OpenMind model and hopefully the idea of open-source publishing will live on.
I just regret that we won’t be the catalyst.”