VMware Confirms Acquisition Talks for Pivotal Software
VMware reveals it is in discussions to buy Pivotal Software for $15 per share, matching the target's original IPO price. The deal brings the software development platform full circle back to its VMware and Dell roots.
VMware confirms it is in discussions to acquire Pivotal Software, the enterprise software company best known for commercializing the Cloud Foundry platform. The proposed deal values Pivotal at $15 per share, which matches its original IPO price and represents a major premium over its current trading value. Because Dell owns a majority stake in both VMware and Pivotal, this potential acquisition effectively brings Pivotal's journey full circle back to its original corporate family.
Pivotal struggles financially despite its technology being used by the majority of Fortune 500 companies. The company reports a net loss of $31.7 million in its most recent financial quarter, and its stock price currently sits at just over half of its IPO price. VMware already owns an interest in Pivotal and sells its services to customers, making this potential transaction a natural consolidation of their existing business relationship.
This acquisition fits perfectly into VMware's broader strategy of buying up key cloud-native technologies. The move follows recent purchases of Bitnami and Heptio, showing a clear pattern of expanding VMware's open-source and developer-focused capabilities. While VMware cautions that there is no guarantee a definitive agreement will occur, industry observers expect the complex but logical deal to close successfully.