NEW YORK (TheStreet) -- Shares of EMC Corp (EMC) were slumping, lower by 2.35% to $26.21 in afternoon trading Tuesday following the company's announcement that it will expand in cloud with the purchase of Virtustream for about $1.2 billion.
The provider of IT storage hardware solutions said the deal will not have a material impact on its 2015 financial results, but is expected to be accretive in 2016.
EMC said the acquisition of Virustream, a privately-held cloud software and services company, will help customers move all applications to cloud-based Internet technology environments.
The deal is expected to close in the third quarter of 2015.
"With Virtustream in place, EMC will be uniquely positioned as a single source for our customers' entire hybrid cloud infrastructure and services needs," said EMC chairman and CEO Joe Tucci in a statement.
Hopkinton, Mass.-based EMC is a provider of enterprise storage solutions, including hardware, software and services.
The company operates in two businesses including EMC's information infrastructure business, and the VMware virtual infrastructure business.
Separately, TheStreet Ratings team rates EMC CORP/MA as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMC CORP/MA (EMC) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year."