VMware To Acquire Carbon Black And Pivotal Software For Nearly $5 Billion

‘These acquisitions address two critical technology priorities of all businesses today—building modern, enterprise-grade applications and protecting enterprise workloads and clients,’ says VMware CEO Pat Gelsinger in a statement.

In a blockbuster move, virtualization superstar VMware said Thursday that it will be buying Carbon Black and Pivotal Software for a combined price tag of nearly $5 billion.

“We are thrilled about announcing our intent to acquire Pivotal and Carbon Black,” said Pat Gelsinger, CEO of VMware, in a statement. “These acquisitions address two critical technology priorities of all businesses today—building modern, enterprise-grade applications and protecting enterprise workloads and clients. With these actions we meaningfully accelerate our subscription and SaaS offerings and expand our ability to enable our customers’ digital transformation.”

VMware and Carbon Black have entered into a definitive agreement under which VMware will acquire Carbon Black through a cash tender offer of $26 per share, representing an enterprise value of $2.1 billion, according to VMware.

[Related: VMware In Talks To Acquire Pivotal Software]

Meanwhile, VMware and Pivotal Software have entered into a definitive agreement under which VMware will acquire Pivotal for a blended price per share of $11.71, comprised of $15 per share in cash to Pivotal Class A stockholders, and VMware’s Class B shares exchanged for Pivotal Class B shares held by Dell Technologies at an exchange ratio of 0.0550 shares of VMware Class B common Stock for each share of Pivotal Class B common stock.

VMware’s acquisition of Pivotal Software has an enterprise value of $2.7 billion.

VMware said Pivotal and Carbon Black addresses key strategic IT priorities such as building apps with a modern approach and protecting enterprise workloads and clients. With Pivotal, VMware will be able to deliver an integrated modern app portfolio combining Pivotal’s next-generation developer platform and VMware’s Kubernetes portfolio.

With Carbon Black, VMware said it will be able to provide a next-generation security cloud with Carbon Black’s protection suite and VMware’s intrinsic security assets. Adding these companies to VMware’s portfolio will allow VMware to deliver software offerings that enable customers to build, run, manage, connect and protect any app, on any cloud and any device.

Under the terms of the Carbon Black agreement, Carbon Black stockholders will receive $26 per share cash for each share held, resulting in a net cash payout for VMware of $1.9 billion. The transaction will be funded through cash on the balance sheet and access to short-term borrowing capacity.