VMware Completes $2.7 Billion Pivotal Software Acquisition

VMware touts the role of Pivotal’s cloud platform and development tools in enabling customers’ digital transformation initiatives.

Virtualization technology stalwart VMware has completed its acquisition of Pivotal Software in a move that adds Pivotal’s cloud application platform and development tools to VMware’s technology portfolio.

VMware completed the acquisition, which carries a $2.7 billion price tag, on Monday, the two companies said. Trading of Pivotal’s Class A common stock was halted before the New York Stock Exchange opened Monday morning, giving Pivotal’s stock a final closing price of $15 per share.

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VMware CEO Pat Gelsinger (pictured) said in the statement that the combination of VMware and Pivotal is “poised to be the leading enabler of Kubernetes with a deep understanding of both operators and developers.”

Gelsinger said that Ray O’Farrell, previously VMware’s CTO, would lead VMware’s new Modern Applications Platform business unit, which will include the Pivotal and VMware cloud native applications teams. As announced at VMware’s VMworld conference in August, O’Farrell will serve as the business unit’s general manager and retain his executive vice president rank.

“Digital transformation and the applications that drive it should not be restricted only to cloud and software giants,” O’Farrell said in the statement. “We believe that modern application development solutions and practices need to be easily accessible to everyday enterprises across the globe. With Pivotal’s developer capabilities as the foundation, we’ll focus on delivering consumable, enterprise-ready cloud native offerings to customers to help them achieve better business outcomes.”

VMware and Pivotal announced the acquisition deal on Aug. 22. At the same time VMware said it would acquire cybersecurity technology developer Carbon Black for $26 per share, putting that deal’s value at $2.1 billion. That acquisition was completed on Oct. 8.

Dell Technologies owns a controlling interest in VMware and it also owned a controlling interest in Pivotal. In addition to the $15 per share VMware paid to Pivotal Class A common stockholders, Dell, Pivotal’s Class B common stockholder, received approximately 7.2 million shares of VMware Class B common stock in exchange for the Pivotal shares Dell held.