Thu. Nov 21st, 2019

VMware to acquire Carbon Black, Pivotal Software

1 min read

This article previously included an inaccurate figure for the blended per-share price of the Pivotal acquisition. It has been updated.

VMware Inc.

VMW, +0.04%

announced two blockbuster acquisitions of public companies Thursday afternoon, one of which was expected. VMware will acquire corporate sibling Pivotal Software Inc.

PVTL, +0.22%,

as expected after filings last week involving both companies’ corporate parent, Dell Technologies Inc.

DELL, +0.12%

The acquisition of security-software firm Carbon Black Inc.

CBLK, +7.69%,

though, was a surprise. Carbon Black went public last year at $19 a share for a valuation of more than $1 billion, and VMware has agreed to pay $26 a share for the company, which VMware said gives Carbon Black an enterprise value of $2.1 billion. VMware said it would pay a blended price of $11.71 a share for Pivotal, paying $15 a share in cash to regular shareholders and swapping VMware shares to Dell for Dell’s shares of Pivotal at an exchange rate of 0.055 shares of VMware for each share of Pivotal. The enterprise value of Pivotal is $2.7 billion in that agreement, VMware said. VMware stock fell about 4% after the news was announced, which came in conjunction with second-quarter earnings. Pivotal stock gained more than 7% after closing at $13.70, and Carbon Black shares moved a bit higher after gaining 7.7% in the regular session to $24.50.

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