Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RALEIGH, N.C. – Is there merger-and-acquisition activity in Red Hat’s future? Could be.

Charlie Peters, chief financial officer at (NYSE: RHT) certainly seemed to hint at a growth strategy outside of organic in a conference call with analysts Tuesday during which he and Chief Executive Officer Jim Whitehurst discussed

Sarah Friar of Goldman Sachs, asked Peters about M&A come 2010 for the world’s top Linux software developer and services provider.

“Just a follow-up, given that you have a lot of cash sensing on the balance sheet and as we’ve looked out, we’ve seen the beginning of M&A in the software group this year, but it seems like 2010, we could see an up tick. How are you folks thinking about looking at strategic deals on top of just your pure organic growth?”

Peters’ response, as reported by SeekingAlpha:

“From a M&A perspective I think, the type of targets we would look at, really haven’t changed much, which is we think as we said before, technology tuck in there that help us as compliment our existing business this would be one area of opportunity.

“The second might be something in the services space that helps the middle areas, so much of Inotera business that we acquired in the U.S. little bit more than a year and half of so ago.

“Then the third might be something in the distribution area that helps us get into geographies that we currently don’t have a large present. Generally, these types of companies in our space are going to be relatively small, the IPO technology company obviously is not going to be open source. Software company that has profits and cash borrowings are actually those around.

“At least for my view, the other major thing require beyond cash doing in the day is management time and attention and frankly I feel very good about our execution now, I feel very good about the prospects in the core businesses that we’re in and a much more important to me than the cash is, our ability to integrate and execute relative to just continuing to execute on the existing business opportunities we have, which I think are quite big.”

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