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Accelerates any cloud, application, or device strategy
Positions VMware as the most comprehensive portfolio based on Kubernetes for businesses for modern applications.
Weighted price per share of $ 11.71; $ 15 cash per share for public shareholders
Business value of 2.7 billion dollars
PALO ALTO, Calif., Aug. 22, 2019 (GLOBE NEWSWIRE) – VMware, Inc. (NYSE: VMW), a pioneer in enterprise software, and Pivotal Software, Inc. (NYSE: PVTL), the leading cloud provider native platform, announced today that the companies have entered into a definitive agreement under which VMware would acquire Pivotal at a weighted price of $ 11.71 per share, consisting of $ 15 in cash for Class A shareholders, and the exchange of shares of the class of VMware Common Shares B for ordinary Class B Pivotal shares held by Dell Technologies, at an exchange rate of 0.0550 Class B VMware shares for each share. Pivotal Class B shares. In total, the consideration for the merger represents a $ 2.7 billion enterprise value for Pivotal. The board of directors of VMware and Pivotal approved this transaction, in accordance with the recommendations of special committees composed of independent directors of each company. After the closing of the transaction, VMware will be able to provide the most comprehensive portfolio based on Kubernetes for businesses for modern applications.
Pivotal is a technology leader that is transforming the way the world's largest companies build and operate software applications. Over the last six years, Pivotal has been at the forefront of modern software development, helping organizations transform the way they build and execute their most important applications. Pivotal offers a set of powerful assets, including a platform, tools and services for developers, which accelerate the development of modern applications. In addition, Pivotal is a major contributor to the Spring development framework, which receives more than 75 million downloads per month. The company is fully committed to Kubernetes with the recent launch of Pivotal Spring Runtime for Kubernetes and the upcoming Pivotal application service for Kubernetes.
VMware and Pivotal share a long history of collaboration and joint innovation, as evidenced by the co-development and launch of VMware Pivotal Container Service (PKS) in February 2018. VMware increased its Kubernetes-related investments during the year. year with the acquisition of Heptio and the founders of Kubernetes will become one of the three main contributors to Kubernetes. The combination of Pivotal's experience and resources as a developer and VMware's expertise and IT infrastructure will help provide a comprehensive portfolio of products, tools and services needed to create, execute and manage modern applications. on Kubernetes infrastructure with speed and efficiency.
"Kubernetes is becoming the de facto standard for modern multi-cloud applications. We are excited to combine Pivotal's development platform, tools and services with VMware's infrastructure capabilities to provide a complete portfolio of Kubernetes for creating, running and managing modern applications. " said Pat Gelsinger, CEO of VMware. "It's important to note that adding Pivotal to our platform accelerates our broader vision of" Any Cloud, Every App, Every Device "and reinforces our leadership position in today's multi-cloud computing infrastructure.
"The time is right to join forces with VMware, a leader in the industry sharing our commitment to making contributions to the open source community and our goal of adding value to developers beyond Kubernetes," said Rob Mee. , CEO of Pivotal. "VMware has already proven itself by helping organizations leverage and manage a cohesive infrastructure to support mission-critical applications. Our two companies have already built a solid foundation on the success of our VMware PKS collaboration. We look forward to continuing our work with VMware to provide even more value to customers building modern applications. "
"VMware's Board of Directors is committed to creating value for all shareholders," said Karen Dykstra, Chair of the Special Committee of VMware's Board of Directors. "After a thorough and independent evaluation of its advisors and close collaboration with VMware's management team, the Special Committee recommended that the Board approve this transaction with Pivotal, given its strong strategic and long-term value for the future. the company and its customers. "
Details about the transaction
Under the terms of the transaction, Pivotal Class A Common Shareholders will receive $ 15.00 per share in cash for each share held, and Pivotal's Class B Ordinary Shareholder, Dell Technologies, will receive approximately $ 7.2 million per share. million common shares of VMware Class B, at a trading rate 0.0550 common shares of VMware Class B for each class B ordinary shares of Pivotal. In total, this transaction translates into a $ 0.8 billion expected net cash payment to VMware. The impact of the shares issued to Dell Technologies would increase its ownership in VMware by approximately 0.34 percentage points to 81.09%, based on the shares currently outstanding. VMware currently holds 15% of the fully diluted shares of Pivotal. The transaction is expected to be funded by cash on the balance sheet, which will provide short-term borrowing capacity and approximately 7.2 million common shares of VMware Class B to Dell. The closing of the transaction is subject to customary closing conditions, including the approval of the Merger Agreement by the holders of at least a majority of the outstanding shares of Pivotal's common shares not owned by VMware, Dell Technologies or their affiliates. affiliated companies (a "majority shareholder"). "Minority") and is expected to be released in the second half of VMware's fiscal year 2020, which ends on January 31, 2020.
advisors
J.P. Morgan Securities LLC acted as financial advisor and Wilson Sonsini Goodrich & Rosati as legal counsel for VMware. Lazard acted as financial advisor and Gibson, Dunn & Crutcher LLP as legal advisor to the special committee of the VMware Board of Directors. Davis Polk & Wardwell LLP acted as counsel to Pivotal. Morgan Stanley & Co. LLC acted as financial advisor and Latham & Watkins, LLP as legal advisor to the special committee of the Pivotal Board of Directors.
Investor conference call
The company will hold a previously announced teleconference at 1:30 pm PT / 16:30 ET To review the financial results, discuss the proposed transaction and business prospects. A live webcast of the event will be available on the VMware Investor Relations website at: http://ir.vmware.com. The slides will accompany the webcast. The replay of the webcast and slides will be available on the website for two months. In addition, six quarters of historical unearned revenue data will also be available on http://ir.vmware.com in conjunction with the conference call.
Pivotal will report financial results for the second quarter of fiscal year 2020, which ended August 2, 2019 on Wednesday, September 4, 2019 after market close. Given today's announcement, Pivotal will not hold a conference call to discuss financial results.
Additional Resources
About Pivotal
Pivotal combines our native platform with the cloud, our development tools and a unique methodology to help the world's largest companies transform the way they build and run their most important software applications. Global 2000 companies use our technology to gain strategic advantages in software development and IT operations. Learn more about pivotal.io.
About VMware
VMware software powers the complex digital infrastructure of the world. The company's cloud, networking and security offerings and digital workspaces offer customers around the world a dynamic and efficient digital foundation, supported by a broad ecosystem of partners. Headquartered in Palo Alto, California, VMware is committed to being a force of good, from its breakthrough innovations to its global impact. For more information, please visit https://www.vmware.com/company.html.
Forward-looking statements
This press release contains forward-looking statements, including statements regarding the proposed acquisition of Pivotal Software by VMware, such as: the amount and type of consideration to be paid for each acquisition; net cash and stock payments and the dilutive impact on VMware; sources of financing for acquisitions, including VMware's ability to access short-term borrowings; the planned timetable for acquisitions; Opportunities for growth and expansion of VMware offerings associated with each acquisition and potential benefits for VMware and its customers. These forward-looking statements are subject to the "Safe Harbor" provisions applicable under federal securities laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including the following: (1) the fulfillment or waiver of the conditions necessary to complete the proposed acquisition (including Failure to obtain necessary information); regulatory approvals) on time or at all; (2) uncertainties as to the outcome of the vote of the shareholders of Pivotal with a view to the approval of the acquisition of Pivotal; (3) the possibility that the acquisition will not be closed; (4) the possibility that competing offers may be made; (5) the risks associated with the ability to realize the expected benefits of the proposed acquisition, including the possibility that the expected benefits of the proposed acquisition will not materialize or be realized in a timely manner; (6) the risk that the business is not successfully integrated; (7) the interruption of transactions making it more difficult to maintain commercial and operational relationships; (8) the adverse effects of this announcement or the completion of the proposed acquisition on the market price of the common shares, credit ratings and operating results of VMware; (9) the risk of litigation and regulatory actions related to the proposed acquisition; (10) other effects on enterprises, including effects of industrial, market, economic, political or regulatory conditions; and (11) other unforeseen costs or delays related to the acquisition. These forward-looking statements are made as of the date of this press release, are based on current expectations and are subject to uncertainties and changes in condition, meaning, value and effect, as well as to the accuracy of the information. Other risks detailed in filings with the Securities and Exchange Commission, including the most recent reports from VMware and Pivotal on Forms 10-K and 10-Q and current reports on Form 8-K that we may rank from time to time, which could cause actual results to vary from expectations. VMware and Pivotal assume no obligation to update these forward-looking statements after the date of this release and do not currently intend to do so.
Additional information on basic acquisition and where to find it
This communication may be considered as a solicitation document concerning the merger proposed with Pivotal Software (the "cross-merger"). This communication does not constitute an offer to sell or the solicitation of an offer to purchase VMware securities, or the solicitation of a vote or approval. The proposed merger of Pivotal will be brought to the attention of Pivotal shareholders. In connection with the proposed transaction, Pivotal intends to file a proxy statement and other relevant documents with the Securities and Exchange Commission ("SEC") in connection with the proxy solicitation of Pivotal, the company and Dell Technologies as part of the proposed transaction. transaction. The definitive power of attorney will be sent to the shareholders of Pivotal.
BEFORE MAKING A VOTING OR INVESTMENT DECISION IN CONNECTION WITH THE PROPOSED TRANSACTION, PIVOTAL INVESTORS AND SHAREHOLDERS SHALL READ THE FOLLOWING PROXY FOR THE PROPOSED TRANSACTION (INCLUDING ANY AMENDMENTS OR AMENDMENTS) BECOME AVAILABLE BECAUSE WHERE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement, its amendments or supplements, as well as any other relevant documents and other documents filed by Pivotal with the SEC, may be obtained once such documents have been filed free of charge with the SEC on the SEC's website. the SEC at www.sec.gov.
In addition, Pivotal shareholders may obtain free copies of documents filed with the SEC through the Investor Website on the Pivotal website at www.pivotal.io/investors or by contacting the Relationship Department. with Pivotal investors by email at [email protected].
Pivotal, VMware, Dell Technologies Inc. and certain of their respective officers, directors, other officers and employees may, under the rules of the SEC, be considered "participants" in the solicitation of proxies to shareholders of Pivotal with the proposed transaction. Information regarding persons who may be considered "participants" in the solicitation of proxies will be set forth in Pivotal's Preliminary and Final Proxy Statements when filed with the SEC and other relevant documents to be filed with the SEC. of the SEC in connection with the proposed transaction, may be obtained free of charge from the sources indicated above when they become available. Information regarding certain of these persons and their beneficial owners of the Pivotal Common Shares is also set out in Pivotal's proxy circular for its 2019 Annual Meeting of Shareholders filed with the SEC on May 3, 2019, which can be obtained free of charge from the sources. indicated. above.
contacts
Michael Thacker
VMware Global PR
[email protected]
650-427-4454
Pivotal, Media: [email protected]
Pivotal, investor relations: [email protected]
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