VMware Inc. agreed to acquire AirWatch, a privately held provider of mobile management and security services for companies, for about $1.54 billion.
The maker of virtualization software will pay about $1.175 billion in cash and about $365 million in installment payments and assumed unvested equity. VMware also estimated revenue for the fourth quarter at the high end of its prior view.
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Based in Atlanta, AirWatch provides services for mobile device management and has more 10,000 customers globally and more than 1,600 employees in nine offices.
VMware, which is majority-owned by storage vendor EMC Corp. , has sought to increase bookings by bundling its core virtualization software, an important component of the information-technology sector's shift to cloud computing, with new offerings. The company has said it expects new products, such as its VMwareNSX networking product, to help boost its revenue.
The AirWatch team will continue to report to founder and Chief Executive John Marshall as part of VMware's end-user computing group, led by Sanjay Poonen.
The deal has been approved by the boards of both VMware and AirWatch, and the acquisition is expected to close late in the first quarter. It will be funded through a combination of balance sheet cash and proceeds from approximately $1 billion of additional debt to be provided by EMC.
VMware also will continue with its continuing share buyback program.
In addition, VMware estimated fourth-quarter revenue of $1.48 billion, the high end of its October view of $1.45 billion to $1.48 billion.
(END) Dow Jones Newswires
October 10, 2017 09:49 ET (13:49 GMT)