AirWatch develops software for mobile device management, mobile application management and mobile content management. "With mobile device usage becoming more prevalent in the workplace, we believe this acquisition will prove strategic in complementing and enhancing VMW's end-user computing business," wrote ISI Group analyst Brian Marshall, in a note released Wednesday.
The Atlanta-based firm has over 10,000 customers around the world and employs more than 1,600 people. ISI Group estimates that AirWatch's 2013 revenue was between $125 million and $150 million.
VMware will buy AirWatch for $1.175 billion in cash and around $365M of installment payments and assumed unvested equity."AirWatch provides best-in-class, secure, enterprise-mobile management to thousands of businesses around the world," said VMware CEO Pat Gelsinger, in a statement. "With this acquisition VMware will add a foundational element to our end-user computing portfolio that will enable our customers to turbo-charge their mobile workforce without compromising security." The deal has been approved by the boards of both companies and is expected to close towards the end of this year's first quarter. The purchase will be funded with a combination of cash on VMware's balance sheet and proceeds from around $1 billion of additional debt provided by VMware's parent company EMC (EMC). TheStreet's Jim Cramer recently described virtualization trailblazer VMware as an exciting company and "a very good stock". The company's shares have gained more than 37% over the last six months. Virtualization lets users divide physical hardware into multiple "virtual" chunks and has grown in popularity among users looking to juggle myriad of operating systems and applications. VMware also announced its preliminary fourth-quarter results before market open, reporting revenue of $1.48 billion, up 15% on the prior year's quarter and above analysts' estimate of $1.47 billion. Shares of VMware dipped 1.86% to $95.55 before market open on Wednesday. --Written by James Rogers in New York. Follow @jamesjrogers >Contact by Email.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV