Authorization

VMware says its looking to acquire Pivotal

VMware today confirmed that it is in talks to acquire software development platform Pivotal Software, the service best known for commercializing the open-source Cloud Foundry platform. The proposed transaction would see VMware acquire all outstanding Pivotal Class A stock for $15 per share, a significant markup over Pivotals current share price (which unsurprisingly shot up right after the announcement).
Pivotals shares have struggled since the companys IPO in April 2018. The company was originally spun out of EMC Corporation (now DellEMC) and VMware in 2012 to focus on Cloud Foundry, an open-source software development platform that is currently in use by the majority of Fortune 500 companies. A lot of these enterprises are working with Pivotal to support their Cloud Foundry efforts. Dell itself continues to own the majority of VMware and Pivotal, and VMware also owns an interest in Pivotal already and sells Pivotals services to its customers as well. Its a bit of an ouroboros of a transaction.
Pivotal Cloud Foundry was always the companys main product, but it also offered additional consulting services on top of that. Despite improving its execution since going public, Pivotal still lost $31.7 million in its last financial quarter as its stock price traded at just over half of the IPO price. Indeed, the $15 per share VMware is offering is identical to Pivotals IPO price.
An acquisition by VMware would bring Pivotals journey full circle, though this is surely not the journey the Pivotal team expected. VMware is a Cloud Foundry Foundation platinum member, together with Pivotal, DellEMC, IBM, SAP and Suse, so I wouldnt expect any major changes in VMwares support of the overall open-source ecosystem behind Pivotals core platform.
It remains to be seen whether the acquisition will indeed happen, though. In a press release, VMware acknowledged the discussion between the two companies but noted that there can be no assurance that any such agreement regarding the potential transaction will occur, and VMware does not intend to communicate further on this matter unless and until a definitive agreement is reached. Thats the kind of sentence lawyers like to write. I would be quite surprised if this deal didnt happen, though.
Buying Pivotal would also make sense in the grand scheme of VMwares recent acquisitions. Earlier this year, the company acquired Bitnami and last year, it acquired Heptio, the startup founded by two of the three co-founders of the Kubernetes project, which now forms the basis of many new enterprise cloud deployments and, most recently, Pivotal Cloud Foundry.
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«     2019    »
 1234
567891011
12131415161718
19202122232425
262728293031