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July 27, 2007
Investment -- VMware picks up more
A few weeks ago Intel invested $200M in VMware and bought themselves a seat on the board. Now today Cisco joins in and adds another $150M (with seat). Deal comes as VMware is preparing for a closely watched initial public offering. EMC, of Hopkinton, Mass., the world's largest maker of corporate data-storage equipment, plans to spin off 10% of VMware, in an IPO.
Cisco Investing $150 Million in VMware
By Scott Ferguson
July 27, 2007
VMware, on the eve of its highly anticipated initial public offering, finds itself with a new partner and investor—Cisco Systems.
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On July 27, the two companies announced that Cisco will invest $150 million in VMware and receive about 1.6 percent of the virtualization vendor's common stock. The investment also means that VMware will appoint a Cisco executive to its board of directors after the IPO is formally announced later this year.
The Cisco investment follows a similar move by Intel, which announced on July 9 that it would invest $200 million in the company and also have an representative sit on VMware's board.
The latest investment in VMware comes as the company's IPO draws closer to becoming reality, although no formal date for the announcement has been set. When it does happen, EMC, which now wholly owns VMware as a subsidiary, will sell off about 10 percent of the company.
Even after the IPO is announced, EMC will still control about 90 percent of the Palo Alto, Calif., company's stock, making it the company's largest investor. In addition to the stock that is sold with the IPO and investment by companies such as Cisco and Intel, a portion of VMware's shares will be set aside for its employees.
Posted by Staff at July 27, 2007 05:40 PM