VMware completes $2.7 bn Pivotal acquisition

California, US-based software company VMware has announced that it has acquired cloud-native platform provider Pivotal Software in a deal valued at $2.7 billion.

Combining Pivotal’s developer-centric offerings to VMware’s Kubernetes run-time infrastructure and management tools will result in a comprehensive enterprise solution that will dramatically improve developer productivity, the company said in an official statement. 

Pivotal’s Class A common stock was removed from listing on the New York Stock Exchange and the firm will now operate as a wholly-owned subsidiary of VMware, the statement added. Pivotal will be core to the VMware Tanzu portfolio of products and services.  

“As Pivotal is now part of VMware, I want to thank the Pivotal leadership team for building a great company. Together, we’re poised to be the leading enablers of Kubernetes, with a deep understanding of both operators and developers,” Pat Gelsinger, CEO, VMware, said.

VMware announced the setting up of a modern applications platform business unit, bringing together the cloud native application teams of both companies. Ray O’Farrell will be the executive vice president and general manager of the unit, according to a company release.

“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,” said O’Farrell.

Under the terms of the transaction, Pivotal’s Class A common stockholders are entitled to receive $15.00 per share cash for each share held. Pivotal’s Class B common stockholder, Dell Technologies, received approximately 7.2 million shares of VMware Class B common stock at an exchange ratio of 0.0550 shares of VMware Class B common stock for each share of Pivotal Class B common stock, according to the company’s press release.