VMware has confirmed that it is locked in negotiations to acquire Dell Technologies-owned Pivotal Software.
In an SEC filing on Wednesday, VMware said it is "proceeding to negotiate definitive agreements" to acquire all outstanding shares of Class A common stock in Pivotal Software for cash at $15 per share.
The valuation is 80 per cent higher than Pivotal's closing share price of $8.31 yesterday. Pivotal's shares rocketed 70 per cent last night after VMware confirmed the news.
VMware has also requested that Dell Technologies sell all of its outstanding shares in Pivotal's Class B common stock, aside from those already held by VMware.
In its last financial year ending 1 February 2019, Pivotal grew revenues by 29 per cent to $657.5m, but reported a non-GAAP operating loss of $71.3m. Non-GAAP operating losses for the previous year were even higher at $128.5m.
The M&A negotiations reflect an ongoing trend within Dell Technologies to consolidate its acquired businesses under a single brand.
At its annual conference in Las Vegas in April, Dell scrapped the Dell EMC Partner Programme, replacing it with the Dell Technologies Partner Programme.
Dell also announced several new integrations between VMware and other Dell Technologies brands. It launched the Dell Technologies Cloud, which includes its Cloud Platforms offering and VMware on Dell EMC.
The deal would mark Pivotal's return to VMware ownership, after it was initially spun out of EMC and VMware in 2013.
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