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VMware buys Carbon Black and Pivotal

(Image credit: Shutterstock)

This Thursday, software firm VMware (opens in new tab) announced it was acquiring two enterprise-focused companies - Carbon Black and Pivotal (opens in new tab). As a result, its shares fell seven per cent at the end of the day.

The deals are in the billions. Carbon Black will set VMware back $2.1 billion, and Pivotal will cost it $2.7 billion. Both companies saw their shares rise eight and six per cent, respectively.

Discussing the acquisitions with CNBC, VMware’s CEO, Pat Gelsinger said both acquisitions would be profitable under VMware next year, and in the year after that, the duo will have contributed with more than $1 billion in revenue, incrementally.

“These acquisitions address two critical technology VMware (opens in new tab), Inc. priorities of all businesses today — building modern, enterprise-grade applications and protecting enterprise workloads and clients,” said Gelsinger.

“With these actions we meaningfully accelerate our subscription and SaaS offerings and expand our ability to enable our customers’ digital transformation.”

Both companies are similar in a sense that they focus on modern workloads. While Pivotal builds modern applications, Carbon Black is more about the security tools necessary for modern applications and infrastructures.

The deal is expected to close in early 2020.

Patrick Morley, Carbon Black’s CEO, called the acquisition a “bold move”. “We look forward to working with the VMware team to continue delivering a modern security cloud platform to customers around the world,” he added.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.