EMC Corp. said Tuesday it has agreed to acquire privately held Virtustream for $1.2 billion, a move that may suggest a corporate breakup isn't looming.
The all-cash transaction is expected to close in the third quarter and has been approved by both companies' boards. EMC said the deal won't have a material impact on this year's financial results and is expected to add to revenue and per-share earnings in 2016.
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Chief Executive Joe Tucci called the Virtustream deal "a game changer," adding that it is "a critical and transformative acquisition for EMC in one of the industry's fastest-growing and most important sectors."
Massachusetts-based EMC sells systems used to store corporate business information and maintains an unusual federation of related companies that collaborate but also compete at times. The federation structure has been under attack by Elliott Management Corp. since last summer, and Elliott has been pressuring EMC to spin off its stake in VMware Inc., among other things.
EMC has a cloud presence through VMware. The Virtustream addition appears to be another step in building EMC's federation structure and a potential sign that no breakup is forthcoming.
Virtustream, founded in 2009, provides cloud services to government and enterprise customers including SAP SE, Coca-Cola Co. and Hess Corp. Its xStream cloud software platform is tightly integrated with VMware vSphere, the companies said.
EMC shares, down about 10% this year through Friday's close, rose 0.8% in premarket trading.