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Home / Business / VMware signs definitive agreement to acquire pivotal software NYSE: VMW

VMware signs definitive agreement to acquire pivotal software NYSE: VMW



Accelerates any cloud, any app, any device strategy

Jobs VMware to deliver the most comprehensive Kubernetes-based portfolio for modern applications

$ 11.71 Blended Price Per Share; $ 15 Cash Per Share for Public Shareholders

Enterprise Value of $ 2.7 Billion

PALO ALTO, California, August 22, 2019 (GLOBE NEWSWIRE) – VMware, Inc. (NYSE: VMW), a Leading Innovator in the company software, and Pivotal Software, Inc. (NYSE: PVTL), a leading provider of cloud-native platforms, announced today that the companies have signed a final deal where VMware will purchase Pivotal for a mixed price per share of $ 1

1.71 , consisting of $ 15 per share in cash to Class A holders, and the exchange of shares in VMware's Class B common stock for Pivotal B shares owned by Dell Technologies, to an exchange rate of 0.0550 shares of VMware Class B shares for each share of Pivotal Class B stock. In total, the merger consideration represents a company value of Pivotal of $ 2.7 billion. The Board of Directors of each of VMware and Pivotal has approved this transaction following the recommendations of special committees composed of independent directors in each company. After the transaction is completed, VMware will be positioned to deliver the most comprehensive Kubernetes-based portfolio for modern applications.

Pivotal is a technology leader that transforms the way the world's largest companies build and operate software. For the past six years, Pivotal has been at the forefront of modern software development, helping organizations transform how they build and operate their most important applications. Pivotal offers a powerful set of assets, including a leading developer-centric platform, tools and services that accelerate modern app development. In addition, Pivotal is an important contributor to this spring's developer framework, which sees more than 75 million downloads per month. The company fully embraces 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 shared innovation, which is reflected in the co-development and launch of VMware Pivotal Container Service (PKS) in February 2018. VMware has increased its Kubernetes-related investments over the past year with the acquisition of Heptio , and the Kubernetes founders, to be one of the top three contributors to Kubernetes. The combination of Pivotal's developer experience and assets with VMware's IT expertise and infrastructure will help deliver a comprehensive portfolio of products, tools, and services needed to build, operate, and manage modern applications on Kubernetes infrastructure with speed and efficiency.

“Kubernetes is about to grow as the de facto standard for multi-cloud modern apps. We are excited to combine Pivotal's development platform, tools and services with VMware's infrastructure capabilities to deliver a comprehensive Kubernetes portfolio to build, operate and manage modern applications, "said Pat Gelsinger, CEO of VMware. "What is important to add Pivotal to our platform is accelerating our broader Any Cloud, Any App, Any Device vision and strengthening our leadership position in modern multi-cloud IT infrastructure."

"Time is ideal for teaming up with VMware, an industry leader who shares our commitment to contributions from the open source community and our focus on adding developer value at the top of Kubernetes," said Rob Mee, CEO, Pivotal. VMware has a proven track record of helping organizations operate and manage consistent infrastructure to support mission-critical applications, and our two companies have already built a strong foundation on our successful VMware PKS collaboration, and we look forward to continuing our work with VMware to bring even more value to customers building modern applications. "

" The VMware Board of Directories is committed to creating value for all shareholders, "said Karen Dykstra, Chairman of the Special Committee of VMware's Board of Directors. "After a thorough and independent evaluation with its advisors and collaboration with the VMware management team, the Special Committee recommended the Board to approve this transaction with Pivotal given its strong strategic and long-term value to the company and its customers." [19659006] Information about the transaction
According to the transaction, Pivotal common shareholders will receive $ 15.00 per share for each share held, and Pivotal common B shareholder, Dell Technologies, will receive approximately 7.2 million shares of VMware Class B Shares, with an exchange ratio of 0.0550 shares of VMware Class B Shares for each Shares of Pivotal B Shares. In total, this transaction provides an expected net cash payment for VMware of $ 0.8 billion. The effect of equity issued to Dell Technologies will increase VMware's ownership stake by approximately 0.34 percentage points to 81.09% based on the shares currently outstanding. VMware currently owns 15 percent of fully diluted outstanding shares in Pivotal. The transaction is expected to be funded with cash in the balance sheet, access to short-term borrowing capacity, and approximately 7.2 million shares of Dell VMware Class B shares. The closing of the transaction is subject to customary closing conditions, including approval of the merger agreement by holders of at least a majority of the outstanding shares in Pivotal shares not owned by VMware or Dell Technologies or their affiliates (a "majority minority vote") and are expected in second half of VMware's fiscal year 2020, ending January 31, 2020.

Advisors
JP Morgan Securities LLC served as financial advisor and Wilson Sonsini Goodrich & Rosati acted as legal advisor to VMware. Lazard served as financial advisor , and Gibson, Dunn & Crutcher LLP served as legal advisor to the VMware Board Special Committee, Davis Polk & Wardwell LLP served as Pivotal's attorney, Morgan Stanley & Co. LLC served as financial advisor and Latham & Watkins, LLP served as legal advisor to special committee of the Pivotal Board of Directories.

Investors Conference Call
The company will host a previously announced conference call today at 1:30 pm. PT / 4:30 p.m. ET to review financial results, discuss the proposed transaction and business prospects. A live broadcast of the event will be available on the VMware Investor Relations website at http://ir.vmware.com . The slides will follow the webcast. The replay of the webcast and slides will be available on the site for two months. In addition, six quarters of historical data for unearned earnings will also be made available at http://ir.vmware.com in connection with the conference call.

Pivotal will report financial results for the financial year 2020, which ended on August 2, 2019, on Wednesday, September 4, 2019 after the close of the market. Given today's announcement, Pivotal will not be a conference to discuss the financial results.

Additional Resources

About Pivotal
Pivotal combines our cloud-native platform, developer tools, and unique methodology to help the world's largest companies transform the way they build and operate their most important software on. Our technology is used by Global 2000 companies to achieve strategic benefits in software development and IT operations. Learn more at pivotal.io .

About VMware
VMware software strengthens the world's complex digital infrastructure. The company's offering of cloud, network and security and digital workspaces provides a dynamic and effective digital foundation to customers globally, aided by a comprehensive ecosystem of partners. Headquartered in Palo Alto, California, VMware is committed to being a force for good, from pioneering innovations to global impact. For more information, please visit https://www.vmware.com/company.html.ebrit19659006 Premium and Statements
This press release contains forward-looking statements, including statements regarding the proposed acquisition of Pivotal Software by VMware, for example: the amount and type of consideration expected to be paid for each acquisition; net cash and equity payments and dilution effect on VMware; the sources of funding for the acquisition, including VMware's ability to access short-term loans; expected time of acquisition; the growth opportunities and expansion of VMware's offerings associated with each acquisition and potential benefits for VMware and its customers. These forward-looking statements are subject to current Safe Harbor regulations under federal securities laws. Actual results may differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (1) satisfaction or waiver of the conditions to terminate the proposed acquisition (including failure to obtain necessary regulatory approvals ) in the expected timeframe or at all; (2) uncertainty about the outcome of the Pivotal shareholders' vote to approve the Pivotal acquisition; (3) the possibility of the acquisition not closing; (4) the possibility of competing offers being made; (5) risks related to the ability to realize the expected benefits of the proposed acquisition, including the possibility that the expected benefits from the proposed acquisition will not be realized or will not be realized within the anticipated time period; (6) the risk that the business will not be successfully integrated; (7) disruption of transactions that make it more difficult to maintain business and operational conditions; (8) adverse effects of this announcement or execution of the proposed acquisition on the market price of VMware's common stock, credit ratings and operating results; (9) the risk of litigation and regulatory action related to the proposed acquisition; (10) other business effects, including the effects of industrial, market, economic, political or regulatory conditions; and (11) any other unexpected costs or delays in connection with 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 the condition, significance, value and impact as well as other risks described in documents filed with the Securities and Exchange Commission, including VMware and Pivotal's latest Form 10-K and Form 10-Q reports and current Form 8-K reports that we may submit from time to time, which may cause actual results to differ from expectations. VMware and Pivotal undertake no obligation, and do not intend to update such forward-looking statements at the date of this release.

Additional information on the central procurement and where to find it
This communication may be considered as encouraging material in connection with the proposed merger with Pivotal Software ("Pivotal Fusion"). This communication does not constitute an offer of sale or solicitation of an offer to purchase VMware securities or a request for voting or approval. The proposed pivotal merger will be sent to Pivotal shareholders for consideration. In connection with the proposed transaction, Pivotal intends to submit a proxy statement and other relevant material to the Securities and Exchange Commission ("SEC") in connection with the request for authorizations from Pivotal, the Company and Dell Technologies in connection with the proposed transaction. The final proxy statement will be sent to Pivotal's shareholders.
Before making any mood or investment decisions with respect to the performing songs TRANSACTION, investors and STOCK CARRIERS OF pivotal IS OPPRÅTET TO READ DEFINETLY PROSYNKLÆRING IF FORS INTENTIONAL TRANSACTION (INCL. Businesses when they become available to contextually ESSENTIAL INFORMATION PROPOSED TRANSACTION. The power of attorney, any changes or additions thereto and other relevant material, and any other documents that Pivotal has filed with the SEC, may be obtained when such documents are filed free of charge to the SEC on the SEC's website at www.sec.gov.

In addition, Pivotals may shareholders obtain free copies of the documents filed with the SEC through the Investors section of the Pivotal website at www.pivotal.io/investors or by contacting the Pivotal Investor Relations Department via email at ir @ pivotal.io

Pivotal, VMware, Dell Technologies Inc. and certain of their respective senior executives, directors, other members of management and employees, under the rules of the SEC, may be considered "participants" in soliciting proxies from Pivotal's shareholders in connection with the proposed transaction. Information on the persons who may be considered as "participants" in proxies will be described in Pivotal's preliminary and final proxy statements when submitted to the SEC and other relevant documents to be filed with the SEC in connection with the proposed transaction, each of which may be obtained free from the sources listed above as they become available. Information about certain of these individuals and their beneficial ownership of Pivotal common stock is also provided in Pivotal's proxy statement for its annual shareholders meeting filed May 3, 2019 with the SEC, which can be obtained free of charge from the sources listed above.

Contacts
Michael Thacker
VMware Global PR
mthacker@vmware.com
650-427-4454

Pivotal, Media: press@pivotal.io [19659030] Pivotal, Investor Relations: hcorcos@pivotal.io


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