VMware Inc. (NYSE:VMW) is purchasing Carbon Black Inc. (NASDAQ:CBLK) at $2.1 billion and Pivotal Software Inc. (NYSE:PVTL) at $2.7 billion. The company plans to complete the deals by the end of January next year.
Acquisitions to enhance VMware’s position to compete
This is the largest acquisition of VMware with the deals building on the company’s strength of helping other companies run their software in their data centers. Once the deals are finalized, they will put VMware in a better position to compete in the security market as well as in modern cloud infrastructure activities.
VMware has not yet talked about the cost of synergies the two companies will bring. However, CEO, Pat Gelsinger, states that as from next year, the companies will be running under VMware. He says that the acquisition addresses two priorities, which are the development of enterprise-grade applications as well as protection of enterprise workload and clients. He added that the move means that the company accelerates its subscription and SaaS offering as well as the expansion of the company’s ability to enhance the digital transformation of customers.
Despite the companies being different, they both focus on modern workloads. Carbon Black offers vital security features in securing of modern applications and infrastructures. On the other hand, Pivotal focuses on the development of modern applications, which is attributed to the company’s Cloud Foundry heritage as well as the recently included support for Kubernetes.
Q2 revenue results and Q3 projections
On Thursday the company announced its Q2 2020 earnings and it reported revenue of $2.44 billion and earnings per share of $1.60. Analysts polled by Refinitiv had projected revenue of $2.43 billion and earnings per share of $1.55.
For the third quarter, the company has forecast revenue of around $2.4 billion, excluding certain items and earnings per share of $1.42. Analysts have estimated revenue to be around $2.45 billion and with earnings expected to be around $1.57 per share.