Image from YouTube

Global enterprise software company VMware Inc. (VMware) has finalized its acquisition of cloud-native platform provider Pivotal Software Inc. (Pivotal) with an enterprise value of approximately $2.7 billion.

As a result of the completion of the acquisition, Pivotal’s Class A common stock was removed from listing on the New York Stock Exchange with trading suspended prior to the open of the market today, and Pivotal will now operate as a wholly owned subsidiary of VMware.

“Digital transformation and the applications that drive it should not be restricted only to cloud and software giants,” said Ray O’Farrell, executive vice president and general manager, Modern Applications Platform Business Unit, VMware. “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.”

Have you read “IDC: Cloud infrastructure revenues decline in Q2 2019”?

Pat Gelsinger, CEO, VMware, also announced the selection of O’Farrell as the leader of VMware’s new Modern Applications Platform business unit, which will unite the Pivotal and VMware Cloud Native Applications teams.

The combination of Pivotal’s developer-centric offerings with VMware’s upstream Kubernetes run-time infrastructure and management tools will deliver a comprehensive enterprise solution that enables dramatic improvements in developer productivity in the creation of modern applications. VMware is able to offer product building blocks and integrated solutions that are tested and proven with technical expertise that customers need to accelerate software delivery across data center, cloud and edge environments.

Under the terms of the transaction, Pivotal’s Class A common stockholders are entitled to receive $15 per share cash for each share held (without interest and less applicable tax withholdings), and 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.