This deal has VMware looking to acquire Pivotal Software for a total of $2.70 billion. The company is offering a mix of cash and stock to shareholders of PVTL stock. This gives it a blended price of $11.71 per share.
This offering has VMware offering shareholders of Pivotal Software stock $15 in cash for each share of Class A stock. It also includes exchanging of shares of VMware’s Class B common stock for shares of Pivotal Software Class B common stock held by Dell Technologies (NYSE:DELL). The exchange ratio here is 0.0550 shares of VMware Class B stock for each share of Software Pivotal Class B stock.
“The VMware Board of Directors is committed to creating value for all stockholders,” Karen Dykstra, Chairperson of the Special Committee of VMware’s Board of Directors, said in a statement. “After a thorough and independent evaluation with its advisors, and working closely with the VMware management team, the Special Committee recommended the Board approve this transaction with Pivotal given its strong strategic and long-term value to the company and its customers.”
The deal is set to close during the second half of VMware’s 2020 fiscal year, which ends Jan. 31, 2020. However, it still needs to complete customary closing conditions. That includes getting approval from regulators and shareholders.
PVTL stock was up 8% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.