VMware to buy Carbon Black, Pivotal for $4.8-billion - TechCentral

VMware to buy Carbon Black, Pivotal for $4.8-billion

VMware CEO Pat Gelsinger

VMware has agreed to purchase two software companies on Thursday for almost US$5-billion, expanding its reach in development tools and cybersecurity.

The Palo Alto, California-based company said it was purchasing Pivotal Software, which sells cloud software and services, for $2.7-billion, and Carbon Black, a cybersecurity firm, for $2.1-billion.

VMware, which makes virtualisation and networking tools and is majority-owned by Dell Technologies, said the combined company will provide software to build, run, manage, connect and protect any app on the cloud or any device. Purchasing the two companies will accelerate VMware’s plan to deliver secure, multi-cloud application development.

The two acquisitions “will meaningfully expand our ability to power our customer’s digital transformation”, said Pat Gelsinger, VMware’s CEO.

“These acquisitions address two critical technology priorities of all businesses today — building modern, enterprise-grade applications and protecting enterprise workloads and clients,” he said.

VMware will acquire San Francisco-based Pivotal for a blended price of $11.71/share in cash and stock, the company said in a statement.

“Together, we will form an organisation that combines Pivotal’s expertise modernising organisations with VMware’s capabilities and experience operating at scale,” Pivotal CEO Rob Mee said. Pivotal, a long-term partner of VMware, is also majority owned by Dell.

‘Intrinsic security cloud’

VMware said it will pay $26/share in cash for Waltham, Massachusetts-based Carbon Black, giving the target company an enterprise value of $2.1-billion. Once the deal is complete, VMware said it would be positioned to provide “highly differentiated, intrinsic security cloud” through big data, behavioural analytics and artificial intelligence.

“We now have the opportunity to seamlessly integrate Carbon Black’s cloud native end-point protection platform into all of VMware’s control points,” said Patrick Morley, Carbon Black’s CEO.

Both transactions are expected to be completed in the second half of VMware’s fiscal year, which ends on 31 January.  — Reported by William Turton, with assistance from Jim Silver, (c) 2019 Bloomberg LP

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